S&P 500 a powerful price ceiling remains intact
Resistance is defined as a zone where supply becomes stronger than demand and
prices stop rising. It does not necessarily mean prices will start falling,
however. If the market can absorb the supply of shares for sale - we'll know
that if prices hold their ground here for a few days - then the odds that last
Friday was more than a one-day wonder rally increase. It is less likely that the
market can make new highs if it suffers a steep fall from its current position
on the charts first.
Right now, the amount of time spent trading sideways this past spring season
and the number of times it traded up and down within that span tells us
resistance is quite strong at these levels. There are likely a lot of people who
bought earlier in the year during the very hot first quarter, held on during the
May sell-off and are now eager to sell their shares if they can "get out even."
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