S&P500 Range In The 2,800 For The 5th Time In 6 Months

S&P500 Range - Back Again So Soon?

S&P 500 was up 0.69% on Wednesday as it now is on a 3-day winning streak after coming off a 5-day losing streak. In those 3 days, the S&P 500 has gotten back all the losses from last week and more. The S&P 500 is now at 2810.92. That puts it back in the range it has had trouble with, in the past few months.

The red circles in the chart below show the other 4 instances where it couldn’t get past this area. Part of this resistance is likely because the September record high is just above this level. Once the S&P 500 moves a little higher, it will be attracted to the September record high. Then once it hits a new record high, momentum traders will push it higher.

(Click on image to enlarge)

Investors selling in this current range are probably dubious of the S&P 500 rallying above its September high. It’s not clear the economic slowdown is over, and earnings estimates have been falling quickly. 

A positive yearly ECRI leading index growth rate and stabilizing earnings estimates during the heart of Q1 earnings season would push me to be bullish. A good earnings season would push stocks to a record high. If stocks hit a record before then, there will be extreme pressure on results to beat estimates and for guidance to be solid.

CNN fear and greed index increased 2 points to 60. If you follow this index closely, you can say the 5-day selloff last week helped the market avoid extreme greed territory. I agree that selloffs are healthy. Stocks can’t go up every day. Obviously, that’s stating the obvious. But during an amazing quarter for stocks, it’s worth mentioning.

S&P500 Range - Boeing Stock Recovers Amidst Negative Headlines

Nasdaq increased 0.69%, Russell 2000 increased 0.39%, and VIX fell 2.61% to 13.41. 

It’s not a bad time to go long volatility as stocks have been on a tear while the economy is set to see less than 2% GDP growth in Q1. Once again, no sectors fell on Wednesday. 2 best S&P 500 sectors were healthcare and energy which increased 1.1% and 1.09%. 

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