2/15/2019 Weekly Update: The Manic Depressive Market
by Zach Marsh on Mar 1, 2019
S&P 500 +2.55%
10 Year Treasury -0.2%
Weekly Update: The Manic Depressive Market
The stock market continues its 2019 rebound rally. The Dow Jones Industrial Average is up for the 8th straight week, and the December fear is beginning to seem like a distant memory. The S&P 500 is now up nearly 18% since Christmas Eve, causing anyone who is paying attention to wonder which market move is the “real” market move. We have a market with a personality disorder—manic depressive to the extreme. One minute the world is coming to an end, the next it is all puppy dogs and rainbows. Like a co-dependent partner, we naturally get dragged around by the collar and go along with the emotional swings.
The market has done well to recoup a large chunk of what it had given back since October 1, but it still seems as if it has more to prove before we can believe that we are out of the woods. The 2800 level in the S&P 500 is looming resistance and could prove difficult to penetrate as the market is approaching extremely overbought conditions. The sustainability of this recent rally will be given more validity, if when it sells back down it finds support around 2620 in the S&P 500. For context, that would mean that the market has about another 1% upside before it meets resistance, and about 5.5% downside before it would find support. Given this dynamic it would appear now would be the time for caution rather than bravado.
Have a good weekend.
Zach and Dave
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