For the better part of the third business quarter, the U.S. stock market has been stuck in a range, and we’ve been waiting for a dominant trend to emerge. Well, sports fans, we may finally be getting the much-anticipated breakout from the SPX 4,300 – 4,600 summer range, and at this point, it’s not looking all that swell for the bulls.
We were neutral to slightly bullish throughout July and August, but relative strength indicators emerged this month that have us sitting up. And now it appears traders didn’t care for Powell’s press conference Wednesday afternoon, blistering stocks into the week’s end and placing the S&P 500 index squarely at the edge of the cliff.
Remember that September is a historically weak month for stocks, but the market needs to hold inside the range, or the odds of a correction into the fourth quarter and end of the year increase. 4,300 – 4,330 is the specific support area we have a close eye on, which happens to be the same area the market is moving to as we write this. Things can still turn around, but a close below support weakens the bullish case and will have us aligning with the trend moving into October and the final business quarter of 2023.
The views expressed represent the opinion of Good Life Asset Strategies, LLC. The views are subject to change and are not intended as a forecast or guarantee of future results. This material is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. Stated information is derived from proprietary and nonproprietary sources that have not been independently verified for accuracy or completeness.
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