Faces Key Level as Bulls Maintain Control

• The S&P 500 showed signs of strength during Friday’s trading session, initially rallying and approaching the significant 4500 level. This psychologically important milestone underscores the market’s overall upward momentum.
• Despite the potential for a pullback, the prevailing sentiment suggests a “buy on the dips” strategy.
• Traders should be aware that the upcoming Juneteenth holiday will result in limited electronic trading hours and the closure of the underlying index, posing some challenges for market participants. However, it is obvious that the overall upward trend is still very intact.

For CFD traders, there may still be opportunities to trade, albeit without the benefit of impressions formed by the underlying index. Currently, a pullback to the 4300 level seems plausible, as it aligns with the convergence of the 50-Day Exponential Moving Average in that region. This level could offer considerable support to the market. On the other hand, a decisive breakthrough above 4500 could unleash further upside potential, paving the way for a more substantial rally. However, we need some kind of fundamental reason to continue going forward.

The recent decision by the Federal Reserve to pause rate hikes introduces an element of uncertainty regarding future policy. While it remains uncertain whether they will resume rate hikes later, market indicators such as the Fed Funds Futures markets suggest an expectation for further increases. However, the outcome is far from certain, and with inflation running high, there are inherent risks to consider. In any case, a pullback in the market would serve to attract more buying interest, reinforcing the “buy on the dip” strategy. Traders should note that Monday’s Juneteenth holiday will likely render trading somewhat inconsequential. Do not look to the CFD markets for hints, as it is almost impossible to tell what happens next via this, and of course the institutions won’t be involved.

As the S&P 500 approaches the key 4500 level, market dynamics remain intriguing. The buy-on-the-dip strategy prevails, and although a pullback to the 4300 level seems plausible, a breakthrough above 4500 could signal a significant upside move. The Federal Reserve’s future rate hike decisions contribute to the overall uncertainty. With the Juneteenth holiday impacting trading activity, participants must navigate the market cautiously while keeping a close eye on developments in order to make informed trading decisions.

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