Stocks may have just broken a key level from early in the year, shortly before they suffered a gut-wrenching drop.
Here’s what it felt like at the time: The S&P 500 hit a record high on January 26. It then stalled and chopped in a right range before spiraling lower.
Let’s take a look at that sideways phase between January 30 and February 1. The chart below has 15-minute candles to show how sellers prevented the index from rising back above 2835. Interestingly, yesterday the S&P 500 broke through that resistance zone and entered the bearish gap above. Media reports credited the gains President Trump winning trade concessions from Europe.
Will it keep going or peter out again? Everyone needs to make their own decisions and do their own homework on that one. But remember that some important catalysts in the near-term have positive expectations going in:
- Earnings season keeps rolling along. This week and next are the busiest.
- Economic data: Forecasters expect second-quarter gross domestic product on Friday morning to show the strongest growth in almost four years. Next week brings key payroll numbers, another area that’s impressed recently.
Bottom line: It’s taken almost six months, but stocks may be finally clawing back from February’s big drop.
