The S&P 500 has fallen rather hard during the trading session on Wednesday yet again, but it continues to see the 4250 level as significant support. That being the case, the market is likely to continue to see more of a “buy on the dips” attitude, and therefore I think we continue to see more of this noisy behavior. That being said, it is probably only a matter of time before we have to make a bigger move, and I believe that will be after the jobs number comes out on Friday. Between now and then, I would anticipate a lot of noisy behavior, due to the fact that there are so many negative influences out there.
S&P 500 Video 07.10.21
If we do break down below the 4250 level, then I think the next thing we will have to pay close attention to what will be the 4200 level, followed by the 200 day EMA. In other words, I think that if we do break down a bit from here, there is a rather good chance that we will see buyers reenter this market relatively soon. While the market does seem to be extraordinarily stunned at the moment, the reality is that the pullback has not been massive, and quite frankly has been more “run-of-the-mill” than anything else. The market has been trained over the last 13 years that the Federal Reserve will not let it crash anytime soon, so that being said I think there will be buyers based upon value sooner rather than later.