Stocks Breakout Above Major Resistance Level
If you're not long, you're wrong. Wall street would love to buy your stocks...
In my May 1st newsletter, I noted how stocks were approaching a MAJOR resistance level around ~4,170 on the S&P.
This resistance level was prior support at
2021 lows, and the
Early 2022 lows (before the dip lower last year).
Once that key support level broke, it became resistance.
~4,170 served as a ceiling or resistance for stocks, in
May, 2022
August, 2022
January of 2023
Remember - and I’ve said this a million times - prior support becomes future resistance, and prior resistance becomes future support. Learn why.
Back to the May 1st post…
As price approached this level ~4,170, we saw insane money flows. This, combined with a gridlock in DC, led me to believe it would serve as resistance no more.
In my May 24th newsletter, after stocks failed to breakout (and looked like the bottom was falling out), I noted to NOT get caught up in the hype of a default, and to use this as a buying opportunity.
Here is an updated chart from my May 1st post, noting a potential breakout:
The fact that stocks recaptured levels above ~4,170 for a second time in weeks is huge for bulls. And since the stock market is a future pricing mechanism, probably good for the economy.
Speaking of which, check out this article from last week, confirming the action in stocks…
BlackRock bond chief Rieder says U.S. economy in ‘much better shape’ than doomsayers say
KEY POINTS
Resilient government, consumer spending, improving homebuilder data, low unemployment and more tell BlackRock’s Rick Rieder that the U.S. economy is faring better than many expected.
“I think the U.S. economy’s in much better shape than people give [it] credit” for, Rieder said Tuesday at an event at BlackRock’s New York headquarters.
“I’ve never seen so much money sitting in cash, and a lot of it” waiting for a debt ceiling resolution before being deployed, he said.
Source: https://www.cnbc.com/2023/05/23/economy-good-shape-blackrock-rieder.html
Once the Market Makes Up Its Mind…
Once the market makes up its mind, there’s no stopping it. It appears to be that Bulls are squarely in control, and the potential 50% gain from the 2022 midterm lows is QUICKLY manifesting itself. The bond chief at one of the biggest asset management firms in the world thinks the economy is good, and he appears to be a lone wolf with his views… Watch everyone follow suit now.
If you’re not long… you’re wrong.