Technically Speaking – March 2021

March 3, 2021

Technically Speaking:
Long Term Resistance: SP500 3950 then 4000 Then 4050
Long Term Support: SP500 3800 – 3750 then 3350 – 3300

Markets have been extremely volatile over the past couple of weeks. We have had both breaks of support and breaks of resistance, but there has not been any follow through. This can make investing very frustrating. We rallied to all-time highs in February only to be hit with selling from the social media fiasco around stocks like GameStop. This was followed with aggressive selling of large cap tech as the Senate began hearings on how to set controls on those companies. Technical indicators follow price and do not get influenced by rumors or politics. The current problem is one day the technical analysis look like a big decline is coming, but the next day the rally dissipates those fears and new highs look possible. I will not deny risks are mounting, but we must remember we are about to see an acceleration in the global economy from worldwide stimulus. While I can never rule out a 10 to 15% decline, but I do believe that is unlikely. The shorter-term technical indicators show declines being limited to the 3% to 5% area which sets support at SP500 3750-3800. We continue to use pull backs to add money. We do believe we will see higher highs as money from retirement accounts flows in alongside monetary and fiscal stimulus. Know what you want to buy on declines and know where you will sell on rallies. Always keep your core positions and add and subtract risk accordingly.