The next week will be an interesting week in the stock market. Of course, there’s never any shortage of events that could change the outlook for the market one way or another… But according to a chart of the S&P 500, it looks like we’re at an important technical resistance level. Resistance is an important technical term for a price level where a security’s advance is expected to stall. In other words, it’s a price level where sellers appear, and their actions can often be anticipated. In the chart below, I’ve labeled three factors that are all pointing toward resistance… Read More
The next week will be an interesting week in the stock market. Of course, there’s never any shortage of events that could change the outlook for the market one way or another… But according to a chart of the S&P 500, it looks like we’re at an important technical resistance level. Resistance is an important technical term for a price level where a security’s advance is expected to stall. In other words, it’s a price level where sellers appear, and their actions can often be anticipated. In the chart below, I’ve labeled three factors that are all pointing toward resistance near the S&P 500’s current level around 2,600… 1. The March lows (blue dashed line): Many investors like to buy stocks when they approach previous lows, as it often represents a “safe” bargain price. We saw this in action back in October and November, when stocks fell to their March lows (which then represented “support”) and were met with aggressive buying. However, stocks suffered a rapid loss in December, so anyone who bought at last year’s lows is just getting back to even. From what I’ve observed, many traders tend to sell the moment their positions get back… Read More