Higher Highs and Higher Lows:
The Up-Trend For The S&P 500 Is Still Intact.
- Technically, long-term trend line support for the S&P 500 is at approx. 1970-80.
- Although yesterday registered a significant drop on higher than average volume, until enough selling interest enters the market to push it through that level, the up-trend will continue.
- Trading volume is a concern, as the up-days continue to reveal lower than average volume and the down-days have higher than average volume, however there has not been enough price movement or momentum in either direction to take the S&P 500 out of its short-term range:
- Volatility jumped yesterday, but in general has been well below its historic averages and certainly significantly lower than it was earlier in the year:
What comes next?
- We continue to believe that stocks are expensive:
- However until a sustained break-out from the current trading range in (either direction) occurs, the short-term looks like it will be more of the same, range-bound trading.
- If enough buying emerges to make new highs above 2135 and the market is able to sustain those, a move to 2150 will be likely.
- If selling enters the market, there are a number of points where we would expect to see buying support:
- 2090 at the short-term trend-line.
- 2040 at the March lows.
- 1970-1980 at the December lows and the long-term trend-line.
- That would be approx. a 6% correction.
- We are due for a correction, but only time will tell as to when.
- We remain cautious.