Jan 02, 2025 (MENAFN via COMTEX) --
(MENAFN - Daily Forex)
The S&P 500 has been somewhat lackluster during the month of December, just like its counterpart, the NASDAQ 100. The US stock market was a little bit exhausted by the time we got to the month of December, and although I still believe that this is a market that will go higher over the longer term, I recognize we may have a little bit of sideways action just waiting to happen. Digesting some of the massive shot higher would make a certain amount of sense, because for the most part, 2024 has been a straight shot higher.
Technical Analysis
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The technical analysis for this index is obviously very strong, and I would pay close attention to the 5800 level underneath, an area that previously had been resistance and should now offer support. In fact, if you look at 2 weeks ago, we plunged after Jerome Powell made a mess of the FOMC press conference, only to bounce just above that level. I think this ends up being an area that offers a significant amount of support that a lot of people will be cautious of, and as long as we can stay above there, I think we are looking at a neutral market, perhaps even slightly positive.
If we were to break down below the 5750 level, then a deeper correction comes into the picture, and I think this has a situation where we might have to look for value underneath, which is something that a lot of people would be looking to do, finding"cheap contracts." This is the usual for this market and should only invite more"buy on the dips" traders. This is a market that has plenty of reasons to go higher, despite the interest rate situation in the US being a bit ugly. The market will simply follow the uptrend, if for no other reason than momentum, but we are probably going to grind back and forth for a few sessions, in order to get long. Also, keep in mind that money managers will often have to put money to work for the year as well, so that naturally will increase the volume a bit after the first week.
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