SPX Dip Buy or Bigger Pullback?

$S&P 500(.SPX)$

We hit a high of 6481 on SPX 4 sessions ago and currently pulled back near 6334. The market did show a bit of exhaustion as we have been consolidating above 6400 the last 1.5 weeks. If we lose 6334 it’s possible we do see a bigger pullback. Let’s dive into a few scenarios

Scenario #1: Bull Case

SPX ends up moving back above 6430 and consolidates between 6430-6500 for a couple of weeks. We end up breaking above 6500 Pre-September FOMC meeting rallying us to 6700. Rate cuts occur in September, initial reaction sends us back to 6500 but then dips get bought up and we see 7000 by year end.

Scenario #2: Bear Trap to Bull

SPX ends up pulling back towards 6280 instilling a bit of fear back in the market. Many start to think we see a 6150 test. We end up holding 6280 and ripping back towards 6400+. We consolidate between 6400-6500 before ripping to 7000 by year end after the first rate cut.

Scenario #3: Bear Case

SPX ends up consolidating between 6300-6500 until the FOMC meeting in September. Rate cut occurs but the market reaction isn’t good at all, we end up moving back to 5900 the weeks followed by the cut. We do see a bounce but end up closing at 6300 by year end.

As of today this pullback seems too early to tell if it’s the start of a bigger pullback or a dip buy. We do believe by year end we see 7000 as the market has been pretty resilient to most headlines.

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