Long & Large Winning Streak Is Broken
We examine what happened last week and contemplate what could potentially lie ahead.
The Bottom Line
The S&P 500’s historic 9-week, 20% winning streak ended last week with a successful bull-trap reversal.
That does not break the longer-term uptrend. It simply confirms that the market was extended and due for some profit-taking, risk repositioning, and consolidation.
The sellers finally landed a punch on Friday. Now they have to prove they can keep the pressure on for more than one day and take out the support levels below.
Until they do, the benefit of the doubt still belongs to the persistent dip buyers and the longer-term uptrend.
This week brings several potential sell-the-news catalysts, including CPI, PPI, Oracle earnings, Adobe earnings, Apple’s WWDC, and last, but not least - the SpaceX IPO. In the following week, markets will focus on the first Warsh Fed meeting.
The plan is simple: tighten the short-term risk plan, respect the longer-term uptrend, and make sellers prove they can do more than create a one-day scare.
