The S&P 500 has pulled back just a bit during the trading session on Tuesday only to find buyers yet again. Ultimately, this is a market that I think find plenty of buyers based upon the Federal Reserve loosening monetary policy. As long as that monetary policy is going to continue to be loose, it makes quite a bit of sense that people are buying stocks and that we go looking towards the 3300 level, perhaps followed by the 3400 level.
S&P 500 Video 05.08.20
Ultimately, I believe that the 3200 level underneath is relatively smart, smart, supportive, just as the 50 day EMA underneath should be. Ultimately, I believe in buying value when it appears, in a short-term back-and-forth type of situation. Looking at this chart, we have been grinding higher for a while and I think that will continue to be the case. I have no interest in shorting the market, that has been a fool’s errand for quite some time. As long as the monetary policy stays the same, the stock market will continue to rally.
The markets continue to be very noisy but have more of an upward bias to them than anything else. That is the only thing you can take away from this chart so there is no point in trying to fight the trend, despite the fact that the markets are completely disconnected from economic reality. Monetary stimulus dictates that these markets only go up, and that is really not worth fighting. Can be “correct” in your economic assessment, or you can be profitable. The choice is yours.
For a look at all of today’s economic events, check out our economic calendar.
This article was originally posted on FX Empire
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