Stock market has started strong in 2023, A welcome development after a disappointing performance last year. S&P 500 Indexa broad market gauge, fell about 19.5% in 2022 but has risen more than 6% since then.
What happened: The S&P 500 is approaching its previous two highs of 4,100, increasing the chances of breaking above that level, market strategist Ed Yardeni, said in a market call update from Yardeni Research.
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He said that this stage has been the target of Yardeni Research Market Advisor Joe Faceback Call out at the start of the rally. “He doesn’t see any reason to change it,” he said.
Feshbach said that the sentiment numbers do not support a major breakout above these levels. While a break above 4,100 could result in another 2% or more, the correct strategy is to start reducing previously bought positions to prepare for the market’s next blow.
Noting that it’s hard to predict the downside, Feshbach said, “I just want to start coming back, because this breakout is going to fool most people.”
Yardeni noted that the S&P 500 recently broke above the 200-day moving average on its fifth attempt since the beginning of 2022. “It could fail like the last four attempts if Fed Chair [Jerome] Powell’s He said Wednesday’s presser is much more hawkish (again) than widely expected.
“Nevertheless, we still think the bear market ended last October 12th and the S&P 500 will rise above last year’s close this year.”
Why this is important: Equity markets are entering an important week amid the recent recovery. a bunch of technical earnings, including Apple Inc. AAPL And Alphabet Inc. Google googleis expected to decline, which will create volatility in the market.
Some of these have heavy weightings in the S&P 500 Index. Incidentally, Apple has the top weighting in the index at 6.33% and Alphabet is in fourth place with a weighting of 1.71%.
over and above these, federal Reserve This week is meeting with expectations that it will slow the pace of its rate hikes by 25 basis points. wharton professor jeremy seagal Said the Fed’s message is also important rate with.
Price Action: SPDR S&P 500 ETF Trust DetectiveAn exchange-traded fund that tracks the S&P 500 index ended Friday’s session up 0.23% at $405.68. Benzinga Pro Data.
Read next: Can the market rally continue in a tech-heavy earnings week? Apple, Amazon, AMD, Alphabet, Ford key quarterly reports to watch