Connect with us

Hi, what are you looking for?

firstmarketscanner.comfirstmarketscanner.com

Stock News

This Combination Makes Trading Next Week VERY Dicey

I think just about everyone is on “4600 watch” on the S&P 500 and I can’t blame them. It’s a big level. That was our high in July and now the subsequent recovery has returned the S&P 500 to the most critical price resistance of 2023:

At the time of this writing, the S&P 500 is a dozen points away from this key level, with an earlier high above 4600. A false breakout on the close today, accompanied by that daily PPO rolling over isn’t a great look and combination, knowing how important this breakout would. But even a breakout doesn’t exactly suggest it’s an all-clear-ahead signal. That PPO is suggesting momentum is seriously slowing right now. If we do see a breakout, then be on the lookout for a reversing candle at some point next week. That very well could precede a bout of selling, perhaps as much as 3-5%.

In addition to a few technical reasons to be cautious, next week isn’t a great one for the S&P 500 historically either. Should we struggle the next 1-2 weeks, there is a silver lining. The December 22 through December 31 period is extremely bullish as you can see from the daily annualized returns on the S&P 500 (since 1950) below:

December 21: +71.54%December 22: +31.82%December 23: +16.67%December 24: +27.39%December 25: Market Closed – Christmas holidayDecember 26: +126.94%December 27: +40.72%December 28: -10.07%December 29: +45.11%December 30: +29.78%December 31: +38.5%

For the entire Dec 21-31 period, the annualized return of +40.21% is more than 4x the average S&P 500 return of roughly 9% since 1950. S&P 500 prices rarely see a cumulative loss during these final 11 days of the year.

I believe it’s critical to fully understand the key historical trends on the S&P 500. At EarningsBeats.com, we continue to offer a FREE 7-page PDF report on critical S&P 500 historical trends that every investor/trader should be aware of. To download your FREE copy, CLICK HERE!

Happy trading!

Tom

You May Also Like

Stock News

SPX Monitoring Purposes: Short SPX on 9/1/23 at 4515.77; cover short 9/5/23 at 4496.83 = gain .43%. Gain since 12/20/22: 15.93%. Monitoring Purposes GOLD:  Long...

Business News

Sam Bankman-Fried will head to jail on Friday after a judge sided with a request by federal prosecutors to revoke the FTX co-founder’s bail...

Stock News

It’s summertime, and the living should be easy. Folks do tend to go away in August as the market tends to chop around on...

Stock News

With Labor Day weekend behind us, it’s time to get back to the business of following the stock market. As the broader stock market...