The S&P 500 jumped with the announcement of the ceasefire between the United States and Iran. However, there are a lot of nerves out there, and volatility probably hasn’t disappeared quite yet.
S&P 500
The S&P 500 has rallied rather significantly during trading here on Wednesday as the ceasefire in the United States has driven interest rates much lower with the risk appetite picking up. Because of this, money flew into the markets wherever it could.
The 10-year yield is now at 4.265% which is below the crucial 4.30 level that we have seen as a major disruption to markets and now as rates drop that allows people to step out onto the risk appetite spectrum being institutional traders that is and we are starting to see a little bit of volume picking up.
Short-Term Pullbacks as Buying Opportunities
So, I think short-term pullbacks will end up being buying opportunities as long as the ceasefire looks like it's going to produce something lasting. Right now, we have a little bit of a relief rally. The question is can the Iranians and the Americans come to some type of terms.
If they can then it's very likely that the S&P 500 will break above the crucial 6800 level which was supported for about 50 days and re-enter that consolidation range to go looking at the 7000 level above there. This is an area that has been important multiple times and will continue to cause a few headaches for the bullish traders out there.
All things being equal I don't have any interest in trying to get short. I think if we drop and bounce that's a cue to start buying again. The one situation that could have me short of this market is if tensions flare in the Middle East again and we see the 10-year yield jump above 4.3%.