So the question is: Will the anxiety of the folks on the sidelines to buy on any dip outweigh the anxiety of the longs to protect and harvest profits? The answer to this question will determine the short-term trend of the stock market.

Currently, my short-term outlook is for the pullback to find fairly strong technical support in the area of 1470 to 1500 on the S&P 500 index. The pullback could pause or bounce in the 1530 area, where there is some horizontal support and the 50-day moving average, prior to entering the target zone.

A strong negative fundamental catalyst would probably be required for the stock market to correct beyond that technical target area. If there were such a fundamental catalyst, the next support areas would be found at around 1460, 1400 and 1350. At that point, we would be talking about a correction rather than a mere pullback.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.
James Kostohryz has accumulated over twenty years of experience investing and trading virtually every asset class across the globe.

Kostohryz started his investment career as an analyst at one of the US's largest asset management firms covering sectors as diverse as emerging markets, banking, energy, construction, real estate, metals and mining. Later, Kostohryz became Chief Global Strategist and Head of International investments for a major investment bank. Kostohryz currently manages his own investment firm, specializing in proprietary trading and institutional portfolio management advisory.

Born in Mexico, Kostohryz grew up between south Texas and Colombia, has lived and worked in nine different countries, and has traveled extensively in more than 50 others. Kostohryz actively pursues various intellectual interests and is currently writing a book on the impact of culture on economic development. He is a former NCAA and world-class decathlete and has stayed active in a variety of sports.

Kostohryz graduated with honors from both Stanford University and Harvard Law School.

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