The market has seen a definite resistance line since it first tested 2000 back in July. It’s second attempt to break through came in September and the third attempt came in late November and early December and now it is trying to break out to the upside once more. Note that the second attempt was two months after the first and third was a little over two months but this test is only one month after the previous one with a very sharp rebound. In today’s post Chris Ciovacco will look at the possibilities. ~ Tim McMahon, Editor.
Can Stocks Get Over The Hump This Time?
By Chris Ciovacco, Chief Investment Officer for Ciovacco Capital Management, LLC
Stocks Have Stalled In This Area Previously
The recent push off the Fed meeting low has brought equities back to a familiar area. The chart of the S&P 500 below shows the upper blue line has acted as resistance three times in the last six months (see orange arrows).
Reaction To Economic Data
Investors’ reaction to this week’s economic data will most likely
determine the market’s short-term fate:
Tech, Industrials Side With Bullish Odds
This week’s stock market video shows numerous areas of potential resistance, along with recent positive developments in the technology and industrial sectors.
Investment Implications – The Weight Of The Evidence
While the market’s appetite for risk has improved significantly in the wake of the last Fed statement, the economic and stock market bulls still have some work to do. The evidence we have in hand aligns with an equity-friendly investment stance. However, the market’s recent bipolar nature calls for flexibility until the bulls can take out overhead resistance.
About Chris Ciovacco
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