The S&P 500 has fallen significantly during the course of the trading session on Friday as traders are a bit concerned about the Federal Reserve tightening monetary policy down the road. However, what is even more interesting is the fact that it is “quadruple witching” on Friday, and therefore it is likely that we will see a lot of noisy behavior towards the end of the session. Nonetheless, this is a market that cannot be sold despite the fact that it is very negative in general. With that being said, I think what we have is a “buy on the dips” type of market, because a strong argument can be made for an overreaction.
S&P 500 Video 21.06.21
Looking at this chart, if we do break down below the 50 day EMA it is likely that 4100 would be targeted by support, just as the 4000 level will be with a massive gap there. Nonetheless, this looks to be more or less a simple pullback more than anything else, despite the fact that there is a lot of drama crossing the headlines. I do not see a bearish trend opening up, so therefore a little bit of patience could be rewarded if you get the right signal underneath.
If we can break above the all-time high, then obviously that is a very bullish sign and could send this market towards the 4300 level, followed by the 4400 level as the market tends to move in 200 point increments over the longer term. If we did somehow break down below the 4000 level, then I might be tempted to buy puts.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
More From FXEMPIRE:
