Market Insider with Patti Domm
A downdraft in stocks just before Wednesday’s close could bring out the bears Thursday morning, when three Dow components and dozens of other companies report earnings. Technical strategists are watching the 2,020 level on the S&P 500, below which the index fell to close at 2,018, after rising as high as 2,037 Wednesday.
“This is where the bears are going to try to exercise their idea. “Two-thousand twenty, the intermediate high between the August and September bottoms,” said John Kosar, chief strategist at Asbury Research. Kosar said he’s seeing more positives than negative for stocks, but there may be some friction around the current levels.
“Considering where we are and the kind of climate of the market out there, I would probably be more surprised if we just took off like a shot and didn’t have at least a little back and forth here,” said Kosar, noting the disagreement between investors who see a bear market coming and those who see stocks heading higher.
“There’s enough people on either side that we’re going to have a tug of war near term. That was the line of demarcation in the S&P 500. We’re sort of overbought near term so that’s the logical place, if I was bearish the market, where I would put some shorts out,” he said. Kosar said 2,020 is the intermediary high between the Aug. 25 low of 1,867 and the Sept. 29 low of 1,872.
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