Technically Speaking – February

March 1, 2024

Technically Speaking:

Long Term Resistance : SP500  5300 – 5660

Long Term Support : SP500  4840 then 4550

The markets have continued to rally, with the major indices finishing the month in positive territory for the 4^th consecutive time. Artificial Intelligence remains the main catalyst in this market run, which has now lasted about a year. Nvidia continues to lead the way, which in turn is helping the NASDAQ lead the major indices so far in 2024. This concentration of a few stocks moving the markets higher does not make us the most confident that this rally can continue in the long run the same way it has. Inflation came in higher than expected for January which caused investors to briefly become more cautious with the thought that the Fed will not lower rates as quickly as expected. However, later in the month the personal consumption expenditure report, which is a key report the Fed follows, was in line with expectations, giving investors more hope the Fed will lower rates sooner rather than later.

The SP 500 is only about 3% from the 5300 resistance level, which it is approaching quickly. We will remain on the cautious side as long as the markets hit new highs. During February, we took some profit from our model to raise cash and put a hedge on in the event of a downturn. We are continuing to be patient with our cash as it is earning money in the money market fund. But we are finding opportunities to invest the cash as companies release their earnings reports.