Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Stocks

The S&P 500 Has Traded Back Above Key Resistance – Here’s What To Do Next

by September 10, 2022
September 10, 2022
The S&P 500 Has Traded Back Above Key Resistance – Here’s What To Do Next

The markets ended the week with a strong rally, which occurred despite hawkish comments from several Federal Reserve officials and Fed Chair Powell. Their comments further the possibility that rates will be increased by 75 basis points at their next meeting later this month, while also pointing to a prolonged path of higher rates into next year.

In response, yields rose last week, which is normally a negative for stocks. This is particularly true of Growth stocks as future earnings are reduced in value. The chart below shows the Nasdaq’s response to rising rates, with last week’s rally occurring despite a continued uptick in rates.

DAILY CHART OF NASDAQ ($COMPQ) WITH OVERLAY OF 10-YEAR TREASURY YIELD (TNX)

So what drove stocks higher last week in the face of a rising-rate environment? One factor is that the markets were oversold and due a bounce. Compounding this was a short squeeze, as the most shorted stocks posted gains last week that far outpaced the broader markets. The sharp gains can be seen using the Goldman Sachs Index of the most shorted stocks (which I am unable to share here).

The rally last week pushed the S&P 500 back above its 50-day moving average, which was the next area of upside resistance for this Index. While it’s unclear where the markets will head from here, it’s critical that you have a strategy as market conditions unfold.

If you’re a longer-term investor, last week’s bounce should not change your strategy, as it does not signal a major turning point. The broader markets have not reversed their bear market downtrend and will need to trade above at least their mid-August highs before this can be considered. Shorter-term investors can anticipate a bit more upside heading into Tuesday’s Consumer Price Index (CPI) report and perhaps beyond; however, you’ll need to keep your stops tight, as we’ve seen the markets reverse quickly from short squeeze rallies such as late May.

There are areas of the market that are currently poised to continue higher despite an overall downtrend, which is not unusual. Energy stocks posted sharp gains the first half of this year, while the broader markets suffered.

For more information regarding areas that are poised to trend higher during the currently difficult period, use this link to receive immediate access to my MEM Edge Report, which will provide insights as well as specific stocks. In addition, the link above will provide you with a 4-week trial of my twice-weekly report at a nominal fee. You’ll receive access to a dynamic watchlist of stocks that have superior fundamentals and positive charts, as well as be alerted to when the markets shift.

On this week’s edition of The MEM Edge, now available to watch on demand at StockChartsTV.com and the StockCharts YouTube channel, I review last week’s rally, which pushed the markets above a key area of near-term resistance. I also share stocks from the top-performing sectors that have positive charts, with a focus on base breakouts.

Warmly,

Mary Ellen McGonagle, MEM Investment Research

0
FacebookTwitterGoogle +Pinterest
previous post
Special Note: A Breakout Is In The Offing From This Large Rectangle Pattern; Watch Out
next post
Power Charting TV: Accumulation in the Master’s Own Words

You may also like

Will Rising Oil Prices Smack the S&P 500?

August 2, 2023

The Wisdom of Jesse Livermore, Part 8

June 21, 2023

Is This a Federal Open Market Committee Shake...

July 28, 2023

Unleash the Power of BPI: The Key to...

February 20, 2025

Sector Spotlight: Unleash The Power of Sector Analysis...

November 8, 2023

Sector Spotlight: Sector Rotation with Seasonality — A...

February 7, 2023

The Road to SPX 5000

March 4, 2023

DP Trading Room: Upside Initiation Climax (Should We...

June 3, 2024

Broad-Based Stock Market Selloff: How to Position Your...

September 6, 2024

Market Looks Toppy

May 23, 2024

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Jeremy Hunt: ‘We’re over-medicalising anxiety and depression with sick notes’

      August 2, 2025
    • Cambodia to nominate Trump for Nobel Peace Prize for role in ending country’s conflict with Thailand

      August 2, 2025
    • WATCH: Trump says he is hopeful Hillary Clinton will be investigated for election fraud

      August 1, 2025
    • Trump moves nuclear submarines weeks after praising sub’s power in Iran strikes

      August 1, 2025
    • Recess on ice as Republicans hunker down for high-stakes nominee blitz

      August 1, 2025
    • Iran says it has ‘plenty of scientists’ left to restart uranium enrichment, despite US, Israeli strikes

      August 1, 2025

    Categories

    • Business (8,652)
    • Investing (2,168)
    • Politics (16,282)
    • Stocks (3,228)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved