New Highs in the New Year?
The S&P 500’s advance has been ferocious in November. (Monday’s close puts it on pace for the biggest monthly gain in over a year.) It’s a good time to assess the big index.
The first pattern on today’s chart is the price gap on August 2 after Fitch downgraded the U.S.’s sovereign credit rating. It was resistance in early September before SPX proceeded to drop toward levels from May. But the index probed it yesterday and remains near the gap today.
Other resistance appears in the same area. For example, the October 2021 monthly high was at 4546. There was also a large bearish engulfing candle on July 27 (following a strong quarterly GDP report). Continued upside against these obstacles could put new 52-week highs in play and make bearish views less tenable.
Next is the falling trendline along the peaks of July and September. These were also weekly highs, so moving above the resistance could be viewed as a breakout on the longer-term chart.
Also consider the Nasdaq-100, which has led the S&P 500 for years. The tech-heavy benchmark dragged the broader index into a bear market last year, but now it could be targeting new highs.
Notice the potential cup and handle pattern on the weekly chart above. October’s trough occurred at a 38.2 percent retracement of 2023’s run. That suggests buyers came from the sidelines, willing to accompany stocks like Microsoft, Nvidia and Meta Platforms on their upward journeys.
Second, the final price last Friday (November 17) was the highest weekly close since December 2021. More upside followed on Monday, another potential sign of demand for stocks.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
The first pattern on today’s chart is the price gap on August 2 after Fitch downgraded the U.S.’s sovereign credit rating. It was resistance in early September before SPX proceeded to drop toward levels from May. But the index probed it yesterday and remains near the gap today.
Other resistance appears in the same area. For example, the October 2021 monthly high was at 4546. There was also a large bearish engulfing candle on July 27 (following a strong quarterly GDP report). Continued upside against these obstacles could put new 52-week highs in play and make bearish views less tenable.
Next is the falling trendline along the peaks of July and September. These were also weekly highs, so moving above the resistance could be viewed as a breakout on the longer-term chart.
Also consider the Nasdaq-100, which has led the S&P 500 for years. The tech-heavy benchmark dragged the broader index into a bear market last year, but now it could be targeting new highs.
Notice the potential cup and handle pattern on the weekly chart above. October’s trough occurred at a 38.2 percent retracement of 2023’s run. That suggests buyers came from the sidelines, willing to accompany stocks like Microsoft, Nvidia and Meta Platforms on their upward journeys.
Second, the final price last Friday (November 17) was the highest weekly close since December 2021. More upside followed on Monday, another potential sign of demand for stocks.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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