by Ian Harvey
May 11, 2017
An SPX breakout is imminent, as the S&P 500 Index (SPX) flirted with their first real breakout above 2400 on Tuesday, reaching 2404 at one point before closing just below 2400.
And Wednesday saw a dramatic drop in domestic crude inventories which had crude futures and energy stocks rallying, helping the S&P 500 finish in positive territory, climbing 2.7 points to finish at 2,399.63.
Meantime, the Nasdaq notched an all-time high for the fourth straight day, thanks to impressive earnings from the tech sector, but each of those has been by only a marginal amount with stocks having been stuck in a largely listless trading pattern in recent weeks.
Companies have been turning in a series of stronger-than-expected profit reports, which has tempered concerns that stocks have grown too expensive relative to earnings.
And Sunday’s presidential election in France raised confidence that voters may be turning their back on a nationalistic brand of politics that could hurt global trade.
There is much confidence that the S&P 500 will soon break above 2400 - touching 2450 or even 2500 - before the next consolidation period.
When this occurs it should be a Risk On rally with smaller and high-growth companies leading the charge.
Sometimes you need a positive catalyst to create a breakout of this nature. However, other times the fundamental backdrop is solid and it is the lack of negative news that gives a green light for stock advances.
If you are keen to be part of the action, check out the membership services offered by Stock Options Made Easy, which will provide you an edge for this next leg of the bull market.
Best of Trading,
Director of Stock Options Made Easy