The S&P 500 rallied slightly during the trading session on Friday in the early hours as we continue to look for some type of bigger move. Really at this point though, I think what the market is doing is just simply grinding away. It does seem like there are plenty of buyers willing to step in every time it pulls back, but we don’t have that massive momentum we once had.
It’s more or less steady as she goes. Now, keep in mind, it’s the same handful of stocks moving the S&P 500 that it always has been, and therefore, it’s not a market that you’re going to be looking to get too cute with. You basically pay attention to Nvidia, Microsoft, those types of companies, and if they’re doing well, the index is doing well. The fact that it is not equal weighted eschews it, and it makes it essentially an ETF.
So, with that being said, everybody who is in passive investing, and that is almost everybody, owns the same stocks. Yes, someday that will be an absolute disaster, but right now it just means that money is flowing to the same place and it’s causing the same effect. You see this in most indices around the world that are not equal weighted. So that’s the game we’re playing and that’s just how it is. Short-term pullbacks I think get bought into, especially near $5,100, but $5,000 I think is now your floor in the market. With the 50-day EMA backing that up as support, I have no interest in shorting and late on Friday I suspect we’ll make a run towards $5,200. We’ll see if we can get above there, but once the Americans are by themselves, they do tend to run things up.
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