Technically Speaking – October

November 3, 2021

Long Term Resistance SP500 – 4650 -4700

Long Term Support SP500 – 4425 – 4475

 

The markets have continued to surge since putting in a bottom in early October. The S&P 500 held support just under 4300 and have now made new all-time highs.  The widely followed index continues to break through resistance levels and money has flooded into the markets. If we can stay over S&P500 4600 I expect a series of higher highs and higher lows. The technicals are being supported with continuous stimulus from the FED and ECB. The ECB has decided to hold off tapering, which means they continue to spend billions of dollars to buy bonds every month. The Fed has spoken about tapering but until now, it has only been talk. Another reason the markets continue higher is that the “Build Back Better” bill has been substantially gutted.  They have, at least for now, removed raising income taxes, corporate taxes, and capital gain taxes.  Eliminating raising the capital gains tax means investors are not forced into selling and taking gains this year.  We are in a seasonally strong period thru the end of the year. We may have some small pullbacks, but if there are no surprises from the Fed and Congress, I would expect a series of new highs. Look for opportunities on pull backs and reallocate to match your risk tolerance.

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