Technically Speaking – April 2021

April 2, 2021

Technically Speaking:
Long Term resistance:  SP500 4100 – 4150
Long Term support: SP500 3850 then 3750 – 3700

Markets have been in a confused upward move. We have seen the Dow 30 move higher on days the Tech-heavy Nasdaq fell hard. The SP500 has been back and forth. However, the trend has been up, and
we must respect that. Each time the markets declined, they were met with buying. I believe the ECB stimulus is a big factor. The U.S. has now given money to a lot of citizens, which many will put into the Market, creating a false sense of euphoria. As we move forward, the biggest headwinds will be the new spending bills from the Biden administration. We passed the Covid bill at 1.9 Trillion, and now it is being followed up with an infrastructure package and then a family Health care and welfare package with a price tag over 3.5 Trillion if passed.

While I believe there are a lot of needs that must be addressed, these bills are padded with so much pork unrelated to the major concerns. I am nervous about how we will pay for all of it. Our debt will eclipse 30 Trillion dollars. Where does it stop, and how do we pay for it? We are being told the Corporations, and the Rich People will pay. This may be true directly, but indirectly WE ALL will pay. What administrations don’t tell you is the hidden costs of usage tax and inflation. My experience tells me to be cautious as we move higher. Raise some cash and wait for your opportunities to buy. They will come when you least expect them. Valuations are high and may go higher, but as inflation continues to creep in and interest rates rise, eventually stocks will recalibrate their valuations which means we will be able to buy more comfortably. Stay allocated and use declines to add to risk.