Technically Speaking – August

September 3, 2024

Long Term Resistance: SP500 5625 thru 5650

Long Term Support: SP500  5300 then 5150

Markets rallied in to the end of August reaching or breaking through the all-time highs. Coming into September I am looking for a pullback from these highs. Remember September is statistically the worst month of the year and October has seen a decline that eventually turns into good trading bottoms. I am not sure of the timeline, but I do expect an increase in volatility bringing us to a bottom before the election. A tradeable bottom should look to be bought due to the FED now on the side of lowering rates and if the economy looks to be falling the Fed will bring rates down faster. This should give the impetus to money flowing in and rallying the Markets to new highs again before the end of the year.

We have mitigated risk by reducing our exposure to risk and buying the inverse funds when appropriate. If we get the decline, we will put our cash back to work and sell our hedges. I believe until we have a decline of about 4 to 7%, I believe the risk is higher than the reward for the next few months. If we get a decline the reward will outweigh the risk, and we will look to be buyers again and add to our risk exposure.