Market Update February 22, 2017 -

Rida Morwa
Seeking Alpha
Feb. 22, 2017 10:48 AM ET

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Summary

Market Update and S&P 500 index trading range.

Dear HDO Members,

The S&P 500 index had a strong session on Tuesday (up by 0.6%), following a long weekend from the Presidents' Day holiday. The global markets have been rallying strongly, so it makes sense that New York played a little bit of catchup on Tuesday. In fact all of the major indexes have hit new highs as investors continue to commit capital to stocks, despite technical analysis showing overbought conditions with the RSI at 80 or above for all the indices. Of course we all know the market can remain overbought for a long time, due to a very strong price momentum, a lot of optimism, and still a lot of cash on the sidelines. By looking at the VIX volatility index, it has settled down some after showing signs of potentially climbing higher last week.

So what comes next?

I believe that this market will find buyers every time it pulls back, because quite frankly this is one of the strongest markets I have followed. The way it seems to me, if a correction comes, it will be in the form of consolidation rather than a pullback; the market stops going up but it doesn't go down much either. U.S. indices should continue to lead those of the rest of the world.

S&P 500 Trading Range

To the upside: The next target for the S&P 500 is the 2400 level.
To the downside: The 2350 level for the S&P 500 index is a soft support, and I believe that the absolute "floor" for the index is at the 2300 level.

At this point, I believe that being fully invested continues to be the best course of action.

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