While the S&P 500 didn’t explode to the upside, it certainly showed its wherewithal near the 2790 level, bouncing significantly to break above the 2800 level. By forming a hammer, this shows that the market is “leaning” higher, now all it needs is a good jobs number to lift it to the upside.
The S&P 500 initially fell during trading on Thursday but bounced enough to form a hammer. By doing so, it’s likely that the market is trying to show that it wants to go higher, but the jobs number needs to be out of the way before I think a lot of money jumps into the market. The 2820 level of course is a major level, but if we can clear that I think we could gain another five points rather quickly, and then perhaps another 15 after that.
The alternate scenario of course is that we break down below the lows of the day, but I think that would probably be with some type of horrific mess coming out of the Bureau of Labor Statistics. I don’t think there’s a huge surprise waiting, but if we get it, you need to notice that we could have a bit of “empty space” down to the 2740 handle.
I believe that the market will ultimately try to go higher, but I also recognize that there is a lot of concern around the world, and although there are cracks in the foundation of the rally, I do believe that we are not quite ready to roll over. I believe that the next couple of weeks will probably be somewhat quiet after the jobs number, but you can use that to your advantage if you are patient enough.