The S&P 500 rallied a bit on Tuesday as it looks like we are hell-bent on trying to break through the 4500 level. The 4500 level would offer a certain amount of headline noise, but it certainly looks as if it is only a matter of time before we break above there. At that point, the market would more than likely go looking to the 4600 level as it tends to move in 200-point increments, so the “rhythm of the market” should dictate that we will looking towards that area.
The size of the candlestick is not that impressive, so I do think that we are probably going to get a short-term pullback in order to find value hunters underneath. I have no interest whatsoever in trying to short this market like I said, so I think that if you are patient enough you should be able to pick up the S&P 500 “on the cheap”, as it offers plenty of value. To the upside, the 4600 level is the intermediate target, but really at this point the only thing you need to know about the S&P 500 (SPX, SPY) is that the Federal Reserve is more than likely going to jump in and comply with Wall Street’s desires, meaning more cheap money that they can rollover into more profits in the stock market. That is not going to change anytime soon, because every time they have tried to step away from quantitative easing, Wall Street corrects them rather quickly by selling off the markets.
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