The S&P 500 has edged out new highs. The Nasdaq shows a but more vigor. The Dow is lagging. Is this the end of the sideways period that started in November? Or just a false breakout that pulls in the last buyers? It is hard to tell. Let’s have a look at the S&P (click image to enlarge it):
The support levels have held and the S&P is pushing higher again. But the move seems to lack energy. It has taken a whole month to climb 60 points, which was the loss sustained in just a few days in March. My technical indicators reflect the weakness of this move, barely reaching above zero while the S&P is setting new record highs. This is painting bearish divergences. A quick move to 2200+ would remove those objections and give an “all clear”. Will we get it?
We remain in a lunar red period, which favors some kind of pull back or pause in the next week or two. And our LT wave chart for April, which did indicate the strength of last week, is a lot weaker for this week. So, I would look for the market to give back some of the recent gains.
If the market keeps refusing the downside, then it will tell us the Dow 32000 scenario remains firmly on the table. I will revisit and update that scenario in my next post.