The S&P 500 has pulled back just a bit during the course of the trading session on Friday, to reach down towards the 50 day EMA. The market turning around to form a bit of a hammer of course is a bullish sign, which of course jives well with the last couple of trading sessions. At this point, if we can break above the 3475 handle, then I think it gives the “all clear” for the market to go higher. After all, we have gotten through an FOMC meeting and ended up seeing a recovery after we had initially seen a bit of concern.
S&P 500 Video 27.09.21
That being said, the market is likely to continue to see a lot of buying opportunities on pullbacks, as the Monday candlestick bottom is a significant support level. If we were to break down below there, then it is likely that I will be a buyer of puts, as the market more than likely goes lower, but you certainly cannot short the market in this type of environment. After all, the Federal Reserve will step in and do something if we fall enough, and the 200 day EMA is starting to approach the 4200 level which would be the target.
On the other hand, we have recovered quite nicely, and the weekly candlestick is a hammer. In other words, the market is more than likely going to continue to go higher. I would build my position as things continue to go in my way. Regardless, the only thing I want to do in this market as that actually come out and short it.
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This article was originally posted on FX Empire
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