The S&P 500 advanced slightly closing .35% higher for the week. The bears had the reigns early in the week, but by Wednesday the bulls found some footing and took the S&P 500 for the remainder of the week. It just seems like the S&P 500 is not ready to give up. It didn’t make a new high, but it did finish close to it.
It looks like the S&P 500 is at least attempting to test the high around 2660. If prices start to fail in the coming weeks, it could be what the bears are looking for to pull the S&P 500 at least a little bit lower. The bears have had almost no relief since mid-September. As mentioned last week, the bear bars from a couple weeks ago are the biggest they’ve been in a long time signaling weakness in the S&P 500. This week should be interesting to see if the bulls continue to purchase the highs or if we start to get some profit taking.
The international markets as a whole according the MSCI All World (ex-USA) Index are still stronger than the US S&P 500 on an annual basis. This relationship has started to change as some of the international markets have stopped making progress while the US markets are ticking higher. Many of our current holdings have second purchase ranges that have not been triggered. Most of these ranges are a good distance away from current prices so I doubt any of them will be reached.
It is a big week for economic data. Producer Price Index, Consumer Price Index, FOMC Meeting Announcement & Forecasts are all on the schedule. The Federal Open Market Committee is expected to raise the federal funds rate .25% to a range of 1.25 and 1.5. Any of these reports/numbers could cause volatility in the markets.
The trend of the S&P 500 is up on both the longer and shorter-term basis. Many are saying this last move is exhaustive in nature, which it might be, but right now the bulls are in control of price action and the S&P 500 is set up to make another high this week if they can hold on. Have a great week!
by Adam Straseske, CMT