Still Hunting for 4200

It’s a short week. Futures are down slightly indicating the same for Tuesday morning. Still, the 7-week streak was broken as the major indexes finished higher last week. The SPX still seems to want to test 4200 on the up-side.

The question is, do you sell in May and go away? The down-trend is definitely not out of the picture at this point. And, from a fundamental perspective, consumers are still getting pressured. A lot of the ‘discretionary’ in the budget is now getting re-allocated to the non-discretionary. This is where inflation hits home.

With fuel and food prices continuing to climb, there are fundamental headwinds for this economy. The fact the longer end of the yield curve has not risen dramatically suggests the market believes recession is still possible. So does this analyst.

Trend cautiously. There appears to be a change in leadership for the markets. Spec-tech is seems to be out; quality tech and consumer staples seem to be in. To be continued…

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