The S&P 500 has hit a wall, but powerful market forces are shaping up to push it through
The stock market, as measured by the S&P 500 Index continues to struggle to make headway. The downtrend that began at the beginning of February is still in place.
It is a series of lower highs and lower lows on the SPX chart, and the S&P 500 has repeatedly run into resistance at or below 4080. In fact, the entire area between 4080 and 4200 is a roadblock.
On the downside, the S&P 500 has found support in the zone between 3760 and 3850. Overall, the SPX chart won’t turn bullish unless it can break out over at least 4200 and probably 4300 (the highs of August 2022).
Contrasting the price action of SPX is the fact that many of our firm’s internal indicators have given confirmed buy signals in the past few weeks.
That is certainly positive, of course, but in the past there have been more than a few occasions where SPX doesn’t confirm what the internal indicators might be “saying.”
Market breadth has finally improved over the past few days, and both breadth oscillators are on buy signals as of March 28.
These buy signals were subject to the two-day confirmation process we use to avoid whipsaws if possible.
New 52-week lows on the NYSE have continued to dominate New 52-week highs. On March 29, for the first time in a while, there were more New Highs than New Lows.
If that is the case again on March 30, this indicator’s sell signal would be stopped out. It would not be a new buy signal, though, until new highs exceed 100 in number for two days in a row.