The S&P 500 initially dipped to reach down towards the uptrend line, and then shot straight up for the remainder of the week. Earnings season is among goes, and although that typically causes volatility in stocks, at this point it is all about liquidity. Quite frankly, one of the best things that can happen is that you get some type of horrible negative when it comes to the earnings report, because then you can buy things cheaper before they simply turn right back around. This is because liquidity is the only focus. Well, I should say liquidity and stimulus.
S&P 500 Video 08.02.21
Speaking of stimulus, Joe Biden has basically made it clear that he is going to force the spending of $1.9 trillion in stimulus. That being said, Wall Street will get its cut, either through direct handouts, or people gambling in the stock market like they did last time there was a check sent out. Because of this, everybody is celebrating and quite frankly they know that it is a bit of a self-fulfilling prophecy. Based upon the technical analysis from earlier, we had been consolidating between the 3200 level and the 3600 level. That move measures for another 400 points on the breakout, which measures to reach towards 4000.
Quite frankly, 4000 is far too juicy of a target for the market to ignore right now, so I do think that it is only a matter of time before we get there. Short-term pullback should continue to be buying opportunities, at least for the time being. Yes, the market is getting a bit frothy, but at this point in time gravity has no bearing.
For a look at all of today’s economic events, check out our economic calendar.