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Trends & Analysis
News

Tesla shares spike despite earnings miss

News

Gold loses some shine after hitting record highs

News

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News

Week Ahead Preview: 22nd of April

News

P&G shares rise despite Q3 sales miss

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Gold continues to shine amid geopolitical worries

Asset Watch

Keep your eye on these S&P 500 levels

Tuesday, September 11, 2023

As AI optimism dissipates alongside higher interest rates, stubborn inflation, hawkish central banks and weak economic data out of China, Europe and Canada, the S&P 500 has struggled to maintain its upward momentum. In a nutshell: if AI stocks are already fully valued and cyclical stocks confront a worrisome economic backdrop, it’s difficult to find catalysts that will push the S&P 500 higher.
Seasonality may be exceedingly influential in the weeks ahead. For example, the S&P 500 typically makes its monthly high in mid-September, so a rally this week would align with historical precedent. However, the celebration often ends quickly, and a sharp drawdown occurs from mid-September until early October.
Then again, while a Santa Clause rally could be in the cards after the bearish dust settles, is it prudent to remain vigilant until the calendar becomes more constructive?

The blue line shows how the S&P 500’s 50-day moving average has become resistance, leaving room for a small bounce that approaches 4,478. But, if a reversal occurs, trendline support (the upward-sloping grey line) is near 4,400, and the key level ended the selling pressure throughout August.

Up next is the 100-day MA. If the rising support line breaks, a pullback near 4,350 could provide a solid entry point for those expecting a seasonal upswing into year-end.

So, should you play it safe for the next few weeks, or will a counterintuitive rally be the pain trade over the next month?


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