The S&P 500 has rallied during the course of the week again, capturing the 4700 level. This is a large, round, psychologically significant figure that will attract a certain amount of attention, but what you should be focusing on more than anything else is that we are accelerating to the upside overall, despite the fact that the last two weeks have been relatively quiet. You can see that we have had five weeks in a row that were positive, and now a couple of smaller green candlestick. In other words, there is nothing on this chart that should suggest you should be short of the S&P 500.

S&P 500 Video 22.11.21

When you look at the chart, it is worth noting that the 50 week EMA is sitting just below the 4250 level, which I see as a major “floor the market” going forward. As long as we stay above there, I have no interest whatsoever in trying to short this market, and therefore I think that if we were to break down below that level, I might be a buyer of puts but that would be about it. Nonetheless, the market will continue to rally due to the “Santa Claus rally” as traders around the world trying to make up for their losses or underperformance for the year. After all, many of them have clients that they have to answer to, so this time of year typically sees a lot of chasing. Any time there is a dip, traders are willing to come in and jump all over the market. I think that continues to be the case.