Chart of the week: S&P 500
Blissful new 12 months! It’s time for our chart of the week. Forgive me – I’ve bought a little bit of a sore throat right here and a little bit little bit of a chilly. We’ll work by this.
This week we’re going to do one thing a little bit bit completely different, and we’re going to focus in on the S&P 500 chart. Usually I convey a chart that’s talking to me and provides us an concept of possibly purchase some calls, purchase some places. On this occasion, as a result of it’s the top of the 12 months and we get a pleasant glimpse of how issues went in 2023 and try the chart from a weekly perspective. I wish to focus in on that.
You possibly can see right here I’ve put up the weekly chart of the S&P 500. This goes again to the center of 2021, which is correct over right here on the left hand facet. You possibly can see the good transfer that we made in 2023 – up 24% – actually simply introduced us proper again to the previous highs to start with of 2022. You possibly can see that from the top of October to now, we’ve had an infinite run – a extremely steep run. We will definitely pull again a little bit bit off of that run and nonetheless have the uptrend intact.
Why do I say that? I’ve gone forward and related the lows from October 2022 proper close to the lows to March 2023 to the lows in October 2023. We will definitely pull again to some space above this low, which is about 4,100 in October 2023, and nonetheless have the uptrend intact.
Even all the way down to say the 20 week shifting common, which is available in at round 4,453 – that may be about 300 one thing level drop within the S&P 500. It’ll really feel like the top of the world. It’ll really feel like a panic. Nevertheless it gained’t be. We may definitely see a pull down right here, and we will nonetheless have an uptrend intact. So I’m simply placing collectively a state of affairs right here into the spring and into the summer season. I absolutely suspect that plenty of this transfer goes to get retraced within the subsequent a number of weeks.
So what do you wish to do? You wish to have some safety on, you wish to have some places on. Places are nonetheless low cost. The VIX is up, clearly, into the 14s right here. And we would like to have the ability to defend our portfolios, defend our good points we had in 2023. The one means to try this is: A) both promote what you have got for money, or B) have some safety or some mixture of each money and safety.
Search for a little bit little bit of a pullback right here. It’s not going to be horrible. We’re nonetheless in a bull market. The indications down over listed here are nonetheless bullish. However we bought overbought. There are going to be some individuals who wish to take some income earlier than earnings season will get underway in a few weeks. So check out S&P 500.
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