I’m on vacation so I’ll keep this quick. And because I’m lazy today, I’m writing in the first person. Oh well, I guess it’s a bit editorialized… like everything else in the news these days, right?
So the markets are in an interesting spot. The S&P 500 looks like it’s close to an intermediate resistance level at 3275. If this is the case, we could see the markets move a bit above this but a pull-back toward the 3150 level may be in the cards.
Several of the signals in this market are indicating slightly over-bought conditions. We’ve also seen a lot more activity in the small and mid-cap spaces in the last few weeks. We’ve also seen big tech get knocked around some.
All of this gives the ‘feel’ that values are getting lofty again as money starts shifting around.
The Covid stuff, of course, continues to be meaningful due to the major policy decisions that are still hanging in the wind. Will we see an extension of unemployment benefits? More stimulus? If so, markets can go higher. If not, then it’s time to take a more serious look at the structural changes to our economy… because we’ve hidden those with a few trillion in spending. But they’re not gone…
So here’s the quick summary:
SPX has resistance at 3275… we’ll probably blow past this on Monday (based on futures), but that doesn’t mean we won’t re-trace later this week.
SPX support is at the 50-day moving average, just above 3140. It’s about 4% lower than Friday’s close.
Also, the market seems biased to the ‘close down’ stocks again. The cynic in me is not surprised for many reasons. I’ll spare you my political theories and keep to the numbers. Just look at big tech vs airlines if you want to get a sense of which way the wind is blowing… for now.
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