Prove It To Me Market
As we outlined in a November 20 video
clip, the "return to the year of the whipsaw" action in the S&P 500
over the last few weeks means we prefer to make the market "prove it" by
clearing some overhead guideposts.
Daily Guidepost
If the S&P 500 is to rally for several months and go on to make significant
higher highs, it has to clear and hold above 2093, which is the R1 line shown
in the chart below. The S&P 500 closed at 2089 on Tuesday, November 24.
Weekly Guidepost
When areas of possible resistance or signals occur on multiple timeframes
they tend to be more useful. The R1 level on the weekly chart of the S&P
500 sits at 2095. The S&P 500 closed at 2089 on Tuesday, November 24.
Monthly Guidepost
The possible resistance trifecta is in play with R1 on the monthly S&P
500 chart coming into the picture at 2095. The S&P 500 closed at 2089 on
Tuesday, November 24.
How Can This Help Us?
If the S&P 500 closes over 2095, does it mean we have entered bullish
utopia? No. A single close or even a handful of closes over 2095 does not necessarily
mean resistance has been cleared; there is no magic number of days. If 2095
is cleared and held, the longer the market stays above 2095 and the further
it moves above 2095, the more relevant it becomes.
