After yesterdays late day upside action, the S&P500 pulled itself back over resistance, and is set to open right around there this morning.
The action continues to consolidate after a significant rally to start 2019. The talk of the recent yield curve inversion and the late week pull back for the market, has many seeing stocks trading weaker ahead of what is almost assured to be a recession....right?
Almost every yield curve inversion since the dawn of man has been followed by a recession. Some of the more recent recessions coming within two years of this event. Which means by 2021 we will be in or just coming out of our first full blown recession since 2008... right?
Perhaps.... but again I'm not quite so sure. Either way I think the market still is going to put in fresh record highs... yet again... And baffle those bears for the 10th year in a row. We can talk about the recession after that.
yesterdays late surge pushed us back over resistance:
and the $SPY last week held support and shows a similar picture of price digestion.
and as I pointed out a few months ago, the $SPY momentum triggered positive as the market rallied from the Christmas eve lows. The last trigger came in February 2016. The market rallied significantly from there.
Are we going to see a similar move this time around? Or is the top indeed - finally in for the market?
As it stands now the market is not tipping its hand. Both bears and bulls alike are getting opportunities. Yesterdays strong upside start gave way to a mid-day swoon. Today futures are falling into the open...what does Mrs. Market have in store for us today? If its anything like the last week or so, expect some more gyrations around the long term resistance/support line. At some point I think this market is going to put some distance between itself and that line. Hopefully sooner than later... but it will. And I think it will be that break that starts the next leg up to fresh record highs.