A monster oversold rally -- or perhaps something more -- has arisen in the wake of a rather benign CPI report. There is now renewed hope for several rate cuts this year (several being two, according to the predictions of the Fed futures markets). The reversal began as an oversold rally last Monday, January 13th after $SPX had broken down below support and traded down to 5730. From there, the market gapped up 90 points on Wednesday and just kept going.
Join Larry McMillan as he discusses the current state of the stock market on January 14, 2025.
The stock market saw some seasonally unusual selling at the end of 2024, and now there has been some continuation in 2025. That's not to say there haven't been some strong rally days as well, but it does leave $SPX locked in the 5870-6100 trading range. A clear breakout of that range on a closing price basis should provide momentum for a further trade in the direction of that breakout.
Join Larry McMillan as he discusses the current state of the stock market on January 6, 2025.
The old year ended with a thud, as stocks sold off pretty sharply over the final three days. In doing so, the closing support level at 5870 held once again. So, that is certainly an even more important area than it was before. As long as $SPX holds above that level, the $SPX chart still has a bullish slant. However, if $SPX closes decisively below 5870, then heavier selling should develop.
Join Larry McMillan as he discusses the current state of the stock market on December 30, 2024.
Join Larry McMillan as he discusses the current state of the stock market on December 23, 2024.
The wheels came off the wagon after the Fed meeting on Wednesday. It appears that the Fed's decision to drop rates by 25 basis points, plus their announcement that they might not cut much next year, triggered the selling. But it was probably more of a "sell the news" kind of thing. In the old adage, it's the Fed taking away the punchbowl.
The broad stock market, as measured by indices such as $SPX, continues to probe new all-time highs. This week, there was a positive catalyst in the form of the CPI number, which was benign enough to raise hopes for a further rate cut by the Fed. There is support at 6010, with much stronger support at 5870. As long as $SPX remains above 5870, we will maintain a "core" bullish position. That number may have to be raised eventually, but that's where the strong support is now.
