S&P 500 Steps Up to New Highs

Welcome to Karpel’s Corner. This is where I throw out my thoughts on the markets and share some of my favorite strategies. I keep it market-focused, and never miss an opportunity to teach trading strategies and commentate on the latest trends affecting the financial markets. Hope you enjoy today’s post!

The S&P 500 ($SPX) has hit another high and is doing so one step at a time. This has been an impressive “V” shaped recovery, one that is reminiscent of the rabbit and tortoise race. The bears dashed to the downside only to have the bulls step in and steadily progress to the upside.

The S&P’s broke and settled above the 200-day and 50-day simple moving averages. The gains in the broad based index have been rather incremental, and upside momentum have slowed. The media may start to make a case that this is potentially bearish. Be careful. Yes, the S&P’s have run over 200 points in less than a month. Stocks also appear short-term, overbought, and ripe for a correction. That does not necessarily mean we will get one.

The buying pressure may not be as strong as it was in October, but the buyer is a lot stronger than the seller. I will watch any weakness in the S&P’s for a challenging support zone in the 2000 area. A break of that level in the S&P will have its next support at 1980.

I have three stocks that have jumped up on the radar: Kellogg ($K), Tesla ($TSLA), and Under Armour ($UA). Kellogg looks poised to break to the upside, especially with the wheat markets trading right off the lows. Tesla held support three times in the last month. Watch a break of $250 on the stock, $300 may quickly follow. Finally, Under Armour filled its gap from the summer when it jumped in July to the upside and has broken the downward trend line.

See you next time at the Corner!