The bottom is in…again

1/13/2023

You’ve probably heard me say this before:
“I like it… I don’t love it.”
 
And when looking at the S&P 500, that’s about where I am…
Selling a handful of laggards has been nice, but before we all run out to the front yard to look around and see if the rest of the world knows that “the bottom is in”, let’s take a step back…
(Source: tenor.com)
I know… conversations like these make me a real hit at parties.
But think about it, do we have real reasons to be bullish?
Or have we simply lowered expectations?
There’s also the third viewpoint: “Who cares? Check the chart.”
Bingo.
Take a look at the S&P 500 (SPX):
No lower chart here… Strange, yeah?
I’m sticking with the overall trend and price action here…
As you can see, we haven’t broken away from the downtrend just yet, so this is a bit sneaky and tough to trade.
The horizontal channels are, as usual, levels of Support and Resistance.
 
Support is sitting between ~$3765.00 and ~$3810.00Resistance, on the other hand, is standing tall at ~$4115.00.
Now, I made the case close to a month ago that we could see some upside due to the sideways movement between October and November… and we’re still there!
But we’re at a real sticking point when you look at the downward trendline.
Even with a break above, it could turn around after pulling folks into the market, only for them to get obliterated once it meets the current nemesis — that is, the Resistance level mentioned above.
Here’s another odd thing…
Notice the orange line I’ve drawn in. That’s a small gap and, in the short term, could be considered an imbalance when it comes to price action and volume.
Coincidentally, if that fills, SPX will be brushing up against that trendline…
That’s my first point of interest.
Before I dig in, I’d watch for the crowd’s reaction at ~$4020.00

Keep moving,

(Disclosure: I am long SPX.)

This material is not an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Any performance results discussed herein represent past performance, not a guarantee of future performance, and are not indicative of any specific investment. Due to the timing of information presented, investment performance may be adjusted after the publication of this report. There can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this communication will be profitable, equal any corresponding indicated historical performance levels or be suitable for your portfolio.

Share this:

Facebook
Twitter
LinkedIn
Pinterest
Reddit
Email
Print

test

By registering you are agreeing to our privacy policy

Are you ready for The Great American Reset?