S&P 500

The S&P 500 fell during the day on Thursday, but found enough support underneath to turn things around to form a hammer. The hammer is a very bullish sign, and the market looks very likely to continue going to the upside. We have been in an uptrend for some time, and I believe that the value hunters are still out there looking to take advantage of this market as it is so bullish longer-term. I think that the reason pullback is simply more consolidation in order to build up momentum. Given enough time, I still believe that this market reaches towards the 2500 level, which is my longer-term target. I recognize it may take some time to get above there as it is such a momentous number, but I think a couple of attempts will be made and then eventually the longer-term uptrend continues. I have no interest in selling and believe that the 2400 level remains the “floor.”

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Nasdaq 100

The Nasdaq 100 fell again during the day on Thursday but also on Thursday found enough support underneath the 5700 level to turn things around to form a nice-looking hammer on the daily chart. To break above the top of a hammer should send this market higher, as the Nasdaq 100 continues to look like it is trying to build up enough momentum to continue the longer-term uptrend after the vicious selloff during sector rotation last week. I believe this is a temporary problem, and that the Nasdaq 100 will continue to find buyers based upon longer-term “buy-and-hold” strategies. I still believe that we go looking for the 6000 level, but we may have a few bumps along the way. The 5900 level is obviously a source of resistance, so we may have to take a couple of attempts to finally clear it.

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