Technically Speaking – January

February 5, 2024

Technically Speaking:

Long Term Resistance : SP500  4938 – 5000

Long Term Support : SP500  4700 then 4575

Markets had been rallying and making new highs until Jan. 31^st. The markets fell hard after they heard from FED Chairman Powell that they were not going to cut interest rates. Why this was a surprise to smart money is beyond my comprehension. Since the last meeting the markets have been rallying on the rate cut premise. I have been saying in doesn’t make sense. As much as I would like to see rates lower, the economy is too strong for FED stimulus. We still have inflation above the 2% level, which is the Fed’s target. The tech stocks are breaking out again and continue to lead the markets higher. The AI boom is here for the foreseeable future. I don’t see the markets declining more than 3% to 5%, which could be a good buying opportunity in my opinion. Investors will probably start looking to buy again after the end of the month fall, when they realize the economy is strong and earnings will beat most estimates. On a technical basis I can see the SP 500 moving higher to about 5000 to 5100. That is only 3 to 5% from current levels. Going forward we will remain cautious and reduce positions that have rallied too much too fast. Reducing risk is smart, selling everything is NOT a strategy. There will be opportunities as investors look for out of favor companies while taking profits from the rocket ship stocks that are defying gravity.