Technically Speaking – May

June 6, 2024

Long Term Resistance- SP500 5450

Long term Support – SP500 5000

The Markets rebounded off the April Lows of SP 500 4950. May saw a nice rally to new highs in some of the averages. The catalyst for the Market moves has been good corporate earnings but primarily the Big Tech. Nvidia seems to have defied all reason until you actually study their earnings. NVDIA continues to outpace every other chip company while continuing to outpace all others in new and more powerful chips. As long as they stay ahead of the others they will surge. The spill over to the other companies will also help them become profitable but not at the same pace. Most experts predicted the BIG TECH stocks would slow in 2024 but they haven’t and probably won’t for a while. A.I is here to stay and will continue to grow even better over the next 5 years. All types of companies will be moving to the A.I model to help them streamline, innovate and save costs, all leading to better earnings. Better earnings will support the Markets on the pullbacks that will occur.

We are entering the best 3 months of an election year, so unless a black swan event pops up, expect the markets to be volatile but continuing to make new highs. I am targeting SP500 5450 through 5600 plus for a high this year. Any moves down to 5150 to 5200 would be a place I would increase my risk in my portfolio. I will get much more concerned once we see who wins the election and who holds the power in Congress. The agendas and Tax consequences will be extremely different and those will affect investment strategies.

In summary, I am expecting a pattern of higher highs and higher lows giving us the ability to hold tight for new highs and start planning to mitigate risk as the SP500 approaches 5450 -5500.