The S&P 500 Index initially pulled back just a bit during the trading session on Thursday, perhaps turning around due to more “hopium” out there on Wall Street. The candlestick is rather positive, but the 4000 level will attract quite a bit of attention. If we can break above there, then it’s likely that the market continues to go higher. At that point, we could see a move to the 4200 level, which is an even more important level from a longer-term perspective.
Ultimately, so far this has been a very bullish sign, and it looks as if we still have plenty of momentum. That being said, I believe that the actual trend itself is going to change if we can break above the 4200 level. If that were to happen, then the market is almost certainly going to rally much further. While that is 200 points away, the reality is that if we clear that area, we probably have much further to go. In other words, you won’t necessarily be too late for the move, and therefore I think what we have is a situation where you could just simply get involved then. After all, you want the market to prove itself after the type of beating that it has taken.