The S&P 500’s recent upward momentum is approaching a critical juncture, according to Mark Newton, head of technical strategy at Fundstrat Global. The index was trading 0.2 per cent higher at 6887.75 in New York on Tuesday afternoon. Newton expressed surprise at the aggressive rally, particularly with key events on the horizon, including the Federal Reserve meeting this week and the anticipated meeting between US and Chinese leaders on Thursday.
Newton highlighted that the S&P 500 has rapidly ascended to levels just below 6900, encountering channel resistance that has been in place since July. While acknowledging the uptrend’s strength, he noted that the benchmark is nearing a significant level reminiscent of previous periods in late July, late September and early October, where upward progress stalled before experiencing pullbacks.
“I generally feel it’s right to stay bullish and positive until trends are broken,” Newton stated, suggesting that the channel resistance may prove insignificant, potentially allowing for further gains into November. However, he emphasised the importance of financial sector participation, noting that financials, communication services, and consumer discretionary sectors have exhibited negative performance over the past month.
Fundstrat Global is an independent research provider serving a global network of institutional investors, corporations and high-net-worth individuals. The firm provides market strategy, sector strategy, and company-specific research.
