The recent price action on the S&P 500 has been very interesting. While the long run outlook for this index is up, the recent price action tells a different story.
The S&P 500 experienced an excellent bull run from April 2020 to December 2021. The year 2022 was shaky with huge whipsaws at just about every other month.
2023 looks like we might be getting some stability as the S&P 500 resumes its uptrend. That is, until it entered the range previously formed around the December 2021 high.
Things took an interesting turn as this week ended with a huge selloff. This is an indication that the 4,320 to 4,360 range (see the rectangle) is holding and acting as resistance in the formation of a lower high.
If this level holds up, then it's very likely we begin to see a downtrend for the next little while. Which, by the way, will be supported by a moving average cross-over as confirmation.
Given the fundamentals that we're seeing, this is a real possibility. Consumer income growth falling short of inflation. Corporate layoffs driven by the technology sector show no signs of stopping. Hiring freezes are beginning to take place. Finally, more and more people are dipping into savings and credit to either meet bills or maintain the lifestyles they can't afford.
The S&P 500 experienced an excellent bull run from April 2020 to December 2021. The year 2022 was shaky with huge whipsaws at just about every other month.
2023 looks like we might be getting some stability as the S&P 500 resumes its uptrend. That is, until it entered the range previously formed around the December 2021 high.
Things took an interesting turn as this week ended with a huge selloff. This is an indication that the 4,320 to 4,360 range (see the rectangle) is holding and acting as resistance in the formation of a lower high.
If this level holds up, then it's very likely we begin to see a downtrend for the next little while. Which, by the way, will be supported by a moving average cross-over as confirmation.
Given the fundamentals that we're seeing, this is a real possibility. Consumer income growth falling short of inflation. Corporate layoffs driven by the technology sector show no signs of stopping. Hiring freezes are beginning to take place. Finally, more and more people are dipping into savings and credit to either meet bills or maintain the lifestyles they can't afford.