US indices continue to look bullish, but at this point it also looks like they are trying to work off some of the bigger froth, and this means that we are likely to see a continuation of the overall trend.
The NASDAQ 100 has been very quiet in general, as the Tuesday session starts off with some questions being asked about the trend. Quite frankly though, the longer we sit like this, I think the NASDAQ 100 looks even better because we did have that impulsive run last week after the election. To simply sit here and go sideways suggests that traders are somewhat comfortable.
Short-term pullbacks continue to be buying opportunities, and therefore, I think you have to look at them through the prism of whether or not you are getting any type of value. Beyond that, you can also make an argument that we recently broke above the top of an ascending triangle, suggesting that we have much further to go.
The Dow Jones 30 has been quite as well, but the Dow Jones 30 is much more bullish than the NASDAQ 100, for example. It has ran a little further. So, with that being said, short-term pullbacks offer buying opportunities that allow traders to take advantage of what is an obvious bullish market. In fact, I think it’s really not until you break down below the 41,750 level that you start to think that maybe something is wrong. I think we will go much higher.
The S&P 500 is currently hanging around the 6,000 level, and with that being said, it’s a large round psychologically significant figure that a lot of people, me included, will be paying attention to. Short-term pullbacks should offer buying opportunities with the 5,650 area being the floor in the market.
We are in the midst of some earnings now, but really at this point in time, it’s all about the bond market and whether or not interest rates rise or fall. The one thing is for sure with the S&P 500 right along with the other indices, they’re all in an uptrend. So, if it pulls back, it becomes a little bit cheaper to buy into it. I have no interest in shorting any US indices.
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Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.