The following is an excerpt from our May 29th Keys To This Week report on the US stock market (access requires subscription). These reports, sent to subscribers on Monday mornings, list the 10 key market metrics to watch for that particular week, what they are saying about upcoming market direction, and the investment opportunities — or dangers to your portfolio — they suggest.
Keys To This Week, May 29th 2018:
The US Stock MarketConclusion, Investment Implications, Strategy
First and foremost, the benchmark S&P 500’s (SPX) minor and major trends remain positive (bullish) heading into this week amid indications that the market’s larger 2016 advance is resuming.
Our current cautiously positive overall market bias will remain intact this week above minor underlying support near SPX 2675. However, it would take a sustained rise above SPX 2743, amid narrowing corporate bond spreads and improving volume, to help confirm the market is making a sustainable resumption of its larger 2016 advance.
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Here is the chart that accompanied that analysis/observation, one of nine that were included in the entire report.
In this case, we identified a potential buy area in the S&P 500 at 2675 (actually at 2678 to 2674, per the chart), a place where the market needed to hold to maintain a bullish bias or risk going into a much deeper decline. SPX traded as low as 2677 that day right before rising by 4.3% over the next 10 trading sessions.
The market has been extremely volatile this year, with no real direction, and the flow of news and data can be overwhelming. What should you be paying attention to?
We add unique value by letting subscribers know when to be paying attention — and to what — right when the market is at important inflection points where professional traders have to make tactical decisions in their portfolios. Identifying these turning points, ahead of time, allows investors to manage their risk better — specifically, putting new money to work, or mitigating risk, at the right spots.
Looking ahead, the next key level to watch above the market is 2800 in the S&P 500. We will be carefully watching our 6 key market metrics to determine the internal, “under the hood” health of the market as this level is being tested. A sustained rise above it should clear the way for even better gains in the upcoming months. Stay tuned.
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