The S&P 500 pulled back a bit during the course of the trading week, closing at the very low so quite frankly I am not worried because the S&P 500 only goes higher over the longer term. Because of this, the market is likely to see dips as potential buying opportunities and therefore I think that as soon as we see a little bit of a bounce traders will get back into the market. I do not like the idea of shorting the S&P 500 ever, but I would be willing to buy puts if things do fall down a bit.
S&P 500 Video 13.09.21
With that being the case, I think that it is probably only a matter of time before we see value hunters coming back into the marketplace is simply sit on the sidelines and wait for an opportunity to get long. I believe that the 50 week EMA at the 4000 level is as low as this market will go, as it would represent roughly a 10% drop, which is about when the Federal Reserve starts to worry. Because of this, I think that buying on the dips continues to be the mantra going forward, and it is very likely that we go looking towards the 4600 level before too long. In fact, I do not see a situation where you can short the stock market at all due to the fact that it is not a free trading market anymore.
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This article was originally posted on FX Empire
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