S&P 500 Index has crossed above the psychologically important 5000 level, but with trend channel resistance being tested and seasonality about to turn negative, the market could have a tough time ahead.
*** Stocks highlighted are for information purposes only and should not be considered as advice to purchase or to sell mentioned securities. As always, the use of technical and fundamental analysis is encouraged in order to fine tune entry and exit points to average seasonal trends.
Stocks Entering Period of Seasonal Strength Today:
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Super Simple Seasonal Portfolio
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The Markets
Ongoing strength in growth stocks pushed the S&P 500 Index beyond the psychologically important 5,000 level to end the week as the positivity that surrounds the first half of February continues. The large-cap benchmark added nearly six-tenths of one percent, easily crossing above the milestone level and achieving yet another all-time high. The benchmark continues to push further into overbought territory, according to the Relative Strength Index (RSI), but this hasn’t stopped traders from buying into the technology euphoria that surrounds the Artificial Intelligence boom. Major moving averages continue to rise above one another, supporting prices, and momentum indicators are holding above their middle lines, both characteristics of a bullish intermediate-term trend. But while the technicals of the S&P 500 Index, on their own, are far from being bearish, now that the pull from achieving the important round number is complete, we can at least start to contemplate the prospect of some type of correction following the strong three and a half month run. The last two weeks of February are one of the weakest periods of the year for stocks as traders start to digest the gains that can materialize around the fourth quarter earnings season that has now past its peak. Any evidence of upside exhaustion in the market through the week ahead may warrant pulling back a bit from risk exposure while we wait for the next seasonal rise in stocks during March and April.
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Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
