Asset Watch
Wednesday, December 13, 2023
On the one hand, the S&P 500 has broken out above the key 4,600 level, which roughly marked the July and December highs. If the index can hold the gains over the next few days, confirmation should be in place.
However, S&P 500 seasonality turns bearish soon, as January ties as the worst-performing month of the year. Even though a December rally aligns with historical precedent, the real test arrives when the calendar turns.
A prudent way to play it is to monitor the 20-day moving average (the blue line). It provided support in early December and is a solid gauge of short-term momentum.
So, will the S&P 500 surpass 5,000 over the medium term, or will we see 4,200 first?