The S&P 500 has fallen rather hard during the course of the trading week to reach down towards the 4250 handle. This is an area that has been significant support more than once, and therefore it makes quite a bit of sense that we would see the 4250 level will offer a nice area to play the market from. If we break down below there, then am a buyer of puts as I think we probably go looking towards the 50 week EMA, perhaps even down to the 4000 handle.
S&P 500 Video 11.10.21
On the other hand, if you were to break above the top of the hammer for the week, then we more than likely go looking towards the 4450 handle, maybe even the 4500 level. If we can clear that, it is likely that the market could go much higher, perhaps reaching towards a fresh, new high, as we have been in such a strong uptrend going, despite the fact that we have had a short-term pullback. When you look at the longer-term chart, you can see just how minuscule this pullback has been, even though it has felt quite drastic.
At this point in time, not much has changed, at least not until we break down below the 4000 level. All things being equal, I do think that we eventually get to the all-time highs, and of course beyond. In fact, I would not be surprised at all to see this market try to get to the 5000 level sometime by the end of Q1 of next year.
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This article was originally posted on FX Empire