Technically Speaking – September

October 4, 2023

Technically Speaking:

Long Term Resistance: SP500  4350 then 4450 then 4550

Short Term Support: SP500      4200 then 4175 then 4000 then 3800

September confirmed its historic tendency of being a weak month for stocks. Markets fell to the long-term resistance level and are struggling to find a bottom. Octobers are typically positive months for stocks, but it has been the home to 3 of the biggest crashes in history. Markets usually bottom out in October and move higher into the end of the year. If that is to happen it will have to climb a wall of many worries. The Fed keeps talking about raising interest rates and staying higher for longer. Who knows what that means. In my opinion they are going to continue to bring pain to the Markets until something breaks. They want to see unemployment rise and wage increases become static. This is impossible with energy prices rising due to a lack of production, more regulations, and the obscene gesture of watching Biden walking the picket line which tells ALL unions they have Biden’s support to strike. The problem is that strikes will only increase wages thus causing inflation to stay high and leaving the rest of America, whose wages aren’t rising, trying to figure out how to pay higher bills.  Something is going to break. It will probably involve the banking and commercial real estate market as businesses find ways to cut back and banks find keys in the mail instead of rent checks.  Caution must be used until we see what’s broken and the impact on the economy.  Stock valuations will have to come back in line and the only way I see that is at lower levels.  I would be buying at support levels and reducing risk at the resistance levels, but always keep your core positions.