Technically Speaking – September

October 1, 2024

Long Term Resistance: SP500 5900

Long Term Support: SP500  5200 then 4900

September is historically the worst month of the year with the S&P 500 averaging -0.6%. However, this year the S&P gained about 2% during the month. This was largely due to the Federal Reserve announcing it will cut interest rates by 50 basis points, and the belief being there will be more rate cuts by the end of this year. Inflation is getting closer to the Fed’s goal of 2% which is why they believe it is the right time to begin cutting rates. The markets reflected this news positively with the markets hitting all-time highs during September. The S&P blew through its previous long-term resistance level of 5,650. The new long-term resistance level we are now seeing is 5,900. Long-term support levels are 5,200 and then 4,900. We believe as long as the Fed continues to be dovish and there is no black swan event during the 4^th quarter of this year, we can see the markets continuing to hit new all-time highs.

Even with the belief that markets could continue hitting new highs, we have been taking profits and raising cash. We have also been buying inverse funds on the major indices, to have some protection on a downturn. The markets will never go straight up, and the money markets are still paying well, which is why we are storing cash in there, along with buying inverse funds, as we wait for opportunities.