FXEmpire | March 9 2013 12:46 EST
The S&P 500 had a strong showing during the previous week, taking off from the hammer that formed at the 1500 level during the previous week. This looks strong, but it seems of the 1550 level did offer enough resistance to keep the buyers at bay. Regardless, we see this is a breakout from an obvious ledge, and we think that the 1500 level will now start to act as support going forward.
Because of Federal Reserve easing, it’s easy to imagine a world where the S&P 500 continues to go higher. Also, it should be noted that during the Friday nonfarm payroll jobs number, it was announced that the United States added 265,000 jobs in the month of February. This certainly is bullish for all things American related, and as a result the move higher during the day certainly makes sense. Ironically, it is normally a mainstay of traders to accept the fact that the US dollar will stifle S&P 500 gains when it strengthens, but lately that has not been the case. After all, it appears that traders want to invest in the United States because of its growth, and as a result they have to switch over to Dollars. In other words, is a true fundamental supply and demand question at this point.
Adding to the bullishness of this move is the fact that we ended up closing the market just below the top of the range. Nice long green candles like this after a very supportive month at the same level almost always lead to bigger moves. Because of this, we are very bullish of the S&P 500, and do believe that money will continue to flow into that marketplace.
With all that being said, we like buying pullbacks if we get them, but quite frankly if you have a long enough time horizon, this market could be bought pretty much anywhere as long as you are doing just that – buying it. As for selling, we wouldn’t consider doing so until we got well below the 1450 area.
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Originally posted here