Prices edged lower this week, as the bulls are still reeling from the failed upside breakout that took place in February. After the breakout (whether you consider it to be over resistance at 4100 or whether you consider it to be the blue triangle in Figure 1), prices have pulled back below the apex of that triangle and volatility seems to be slowing down at least on a closing basis.
Join Larry McMillan as he discusses the current state of the stock market on February 27, 2023.
The specter of a false upside breakout has come true, and that could prove to be a major problem for the market. In late January $SPX broke out over 4100, and it looked like the bull market was ready to return. However, the breakout only reached 4200 before prices turned south again. Now, $SPX has fallen below short-term support at 4060-4070, which in my opinion, completes the false upside breakout scenario.
Join Larry McMillan as he discusses the current state of the stock market on February 21, 2023.
Stocks have struggled since the beginning of the month, after having traded at resistance at 4200. $SPX has fallen back below the previous breakout level of 4100. Any close below 4070 would be the lowest close since January, and that would be a further negative for stocks. $SPX has probed down towards that level a few times, but has bounced back up each time. Still, a close below 4070 would open the door to a retracement of the entire previous trading range -- down to 3900, or 3800 on a more extreme move.
Join Larry McMillan as he discusses the current state of the stock market on February 13, 2023.
Bear markets are tricky, and if what we are seeing now is the continuation of the bear market, it is exhibiting some of the actions that are designed to fool most of the people most of the time.
Join Larry McMillan as he discusses the current state of the stock market on February 6, 2023.
The long-awaited breakout over what had become triple resistance at 4100 has occurred. $SPX closed above that level on February 1st and then added another strong day on top of that on February 2nd, thus confirming the breakout with a two-day close above 4100. That should lead to a challenge of the next resistance levels. First, there is the gap just above 4200 that created the island reversal back in August, which led to the downward leg into October at that time. Next up after that are the August highs at 4300.
Join Larry McMillan as he discusses the current state of the stock market on January 30, 2023.
