The S&P 500 gaped higher at the open on Monday, it now seems to be trying to settle at the 2650 handle. This of course is an area that has been resistance, so it’s likely that we will continue to find interest in this area.
The S&P 500 gaped higher at the open on Monday, clearing the 2650 handle. The market rallying to the 2660 level did find a bit of resistance, but eventually we pulled back to test the 2650 level for support. Ultimately, the market should continue to go higher, and then reaching towards the 2700 level. However, if we break down below the bottom of the gap for the day, that would be a very negative sign, perhaps sending this market back down to the 2625 handle. The 2600 level underneath is massive support as well, and essentially where I think that the uptrend ends, least in the short term.
We should see the “Santa Claus rally” soon, which is when fund managers on Wall Street start buying stocks to make it look like they have been doing something all year. It’s called padding the portfolio, and it makes investors happier at the end of the year. This is something that happens quite often, and it looks as if the S&P 500 is ready to continue that tradition. I don’t think we are going to see a massive selloff unless of course we get a failure of tax reform, which right now looks very likely to pass in one form or the other, as the US Senate passed a form of tax reform over the weekend. Late Monday night we will get a resolution vote in the US House of Representatives, and if it moves forward it’s likely that we will have a bill for President Trump to sign in the next week or so.
MORE WILL UPDATE SOON!!
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