Bulls Close Week at Resistance

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The S&P 500 finished the week up 2.54% after the dust settled Friday afternoon. By Wednesday afternoon, the S&P 500 had come pretty close to setting the highs for the week. Thursday’s price action pierced a little higher, but could not make much progress and the index ended up flat on Friday leaving it about what the high was for Wednesday.

Last week we talked about resistance being in the 2600 range on the S&P 500. The high price of the week for the S&P 500 was 2599.5. This is the second push higher on a daily time-frame so it makes for a very interesting coming week.

On the longer-term, the momentum still shows negative with regards to US Equities and the broad MSCI All World (ex-USA) indices. This is a slower reading, so it is going to take more positive price action for this to flip positive. Until the longer-term momentum flips positive, we are taking a defensive stance.

This week we are looking to see if the bulls can break above resistance or if they will stall here and turn back to the downside. We want to focus on the fixed income and emerging markets. Emerging markets have started to pick up again after a couple to few months of being flat so we are getting reasonable buy signals. We’ll be watching closely to see if the bulls can continue their success or if they are going to start taking profits. Have a great week!

Warm regards,

Adam Straseske, CMT

PS – Is there a market you want to hear about? Is there a concept you’d like to know about? Please let me know and I’ll do my best to cover it!

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