S&P 500 Price Continues to Break Higher

There are a lot of concerns out there that will continue to weigh upon bullish pressure.

The S&P 500 has rallied significantly during the trading session on Thursday to show signs of bullish pressure yet again. It appears that the market is willing to overlook a lot of things right now, perhaps with the idea that the Federal Reserve will save everybody. Whether or not they will is a completely different question, but at this point it does not seem like the market is living in reality. However, the 4300 level could be the target, but you need to keep in mind that it is also jobs report Friday and therefore it’s likely be very volatile to say the least.

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I’ll pull back, the 4100 level should be supported, but I think that we probably go lower than that if we get a lot of bad news. If we break down below the 4100 level, then the 4000 level will be targeted, followed by the 3900 level. We are in a downtrend, but bear market rallies tend to be very vicious. Wall Street always find some type of narrative to push stocks higher, so one would have to assume that there is a lot of narrative telling out there right now. Ultimately, I think this is a market that will continue to be very difficult, and noisy to say the least.

I am looking for signs of exhaustion to short in this market, but if we were to break above the 4300 level I’d have to throw in the towel. At that point, you just follow price action because it doesn’t need to make sense. If there’s one thing that Wall Street has taught us, a narrative can go a long way. Indices are built to go higher over the longer term, so that’s why shorting them is generally a very dangerous thing to do. After all, they are built of the largest stocks, and they are not equal-weighted. In other words, all of the “big boys” are what make up most of what you are looking at. In that scenario, it’s very likely that you will continue to see a natural lift higher. However, there are a lot of concerns out there that will continue to weigh upon bullish pressure. With that in mind, I think it’s going to be worse, not better over the next several weeks.