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MENAFN- Daily Forex) Potential signal:
I am a buyer of the S&P 500 as long as we can stay above 6800, with a stop at 6790. I am aiming for the 6980 above. I would make it a small position.S&P 500
The S&P 500 continues to be very noisy, which is not a huge surprise, but when you look at what's going on, it's mainly drama. It's nonsense about Greenland because, at the end of the day, the adults know they will have to come to some type of an agreement. It is worrying about tariffs coming in and out of the European Union or the United States, which in the end, we've survived multiple attempts at implementing massive tariffs, and truthfully, the noise online is deafening. This is the actual definition of a drama-driven market.
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That being said, when you look at the S&P 500, we are actually only down about 2.25% from all-time highs. So, when looked at through the prism of an adult, you can see that it's not the end of the world, regardless of what the retail public seems to think. Institutions are probably out there waiting for the first signs of stability to start buying again. The Federal Reserve is likely to cut once or twice later this year, but we're not near that right now. And there's a reason for that. It's because the US economy is doing quite well. As long as that's the case, we have a situation where you buy the dip. That's been the strategy for decades. That hasn't changed in the last couple of days.
Looking for Value
However, do keep in mind that we have earnings calls coming up in the next couple of weeks, so that could cause some volatility, but that's the type of volatility that you can get your head around. For example, if Amazon reports a loss for the quarter, then yes, you understand that's an actual real thing. Tweets and social media posts and text messages and things like that, those aren't real things.
So, at the end of the day, I'm looking at the 6,800 level as significant support that may or may not hold. And if it doesn't, then I look at the swing low underneath there near the 6,720 level. And then after that, we could go as low as 6,500, where the 200-day EMA is, and still be in a pretty strong uptrend. I think by the end of the week, we will have turned around, barring some other drama, but really, I don't see this as a negative market. I think it's actually offering a little bit of value, and I may start to kind of dip my toes into the water here.
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