“Don’t call it a comeback, I’ve been here for years….’ September highs and constant recession talks. Almost seems like if everyone says the R word enough it will happen. People make the decision to buy and sell stuff. So the more it is said the more people start to act on it. Self fulfilling. Yet the S&P 500 is less than 5% from its all-time high. This is not a comeback. It is just a wobble.
The speed with which the S&P 500 has reversed from the stumble of 2018 should tell market participants that it was overblown. No, back at the top of the October to December consolidation range is when the S&P 500 has something to prove. Over its 200 day SMA, momentum rising and the big round number 2800 staring it in the face.
So how will the S&P 500 react? Big round numbers often act like a black hole keeping price from escaping. So the price action may stall here for that reason alone. But it is also proven to be an area of resistance through the end of last year, so a battleground of sorts. Don’t be surprised if this price level halts the S&P 500 for a while.
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