Rounds numbers have an odd appeal among investors. Every major round number that is broken on the upside or downside is highlighted in flashing headlines and talked about among media pundits who attempt to create a meaning where there usually is none.
The next major round number that is due for some attention among market enthusiasts is the 3,000 level on the S&P. Since Zenolytics believes a break above the 3,000 level will happen in the next couple of trading days, it's time to sit down and discuss the ramifications of such a move.
While moving over 3,000 on the S&P will be celebrated by most every bullish observer, the reality of this level is it throws the market into a twisting, torrential downpour of significant historical resistance. This is the 2910 level on Barry Bonds era steroids with cocaine mixed in for good measure. This isn't just a simple round number exercise. In the case of S&P 3,000 it has significant technical meaning that has nothing to do with the round number.
What does that mean? It means that once we get over this level, barring some type of surprise rate cut that allows the market to pierce the resistance like a Russian rocket, equities are going to have a lot of work to do.
One of the consistent themes Zenolytics has been jumping on the conference room table about for the past few months is the choppy nature of summer trading that is to come. The S&P 3,000 level will only accentuate the choppiness with headline risk that will continue to astound in its propensity for the audacious.
While this may be a case of looking ahead too far being that as of this moment there is nothing to be but bullish with the buying window that opened this week and the resulting blue skies until 3,000, it bears a warning in advance given the significance of the resistance at hand.
In what shouldn't be a surprise to any observer of this site, the ultimate goal of this note is to remind you to prepare to zig while others are zagging. The happy dance coming at the 3,000 level will embody this concept entirely.
Zenolytics now offers Turning Points and ETF Pro premium service Click here for details.
Disclaimer
This website is for informational purposes only and does not constitute a complete description of our investment advisory services. No information contained on this website constitutes investment advice.
This website should not be considered a solicitation, offer or recommendation for the purchase or sale of any securities or other financial products and services discussed herein. Viewers of this website will not be considered clients of T11 Capital Management LLC just by virtue of access to this website.
T11 Capital Management LLC only conducts business in jurisdictions where licensed, registered, or where an applicable registration exemption or exclusion exists. Information contained herein is not intended for persons in any jurisdiction where such distribution or use would be contrary to the laws or regulations of that jurisdiction, or which would subject T11 Capital Management LLC to any unintended registration requirements. Visitors to this site should not construe any discussion or information contained herein as personalized advice from T11 Capital Management LLC. Visitors should discuss the personal applicability of the specific products, services, strategies, or issues posted herein with a professional advisor of his or her choosing.
Information throughout this site, whether stock quotes, charts, articles, or any other statement or statements regarding capital markets or other financial information, is obtained from sources which we, and our suppliers believe reliable, but we do not warrant or guarantee the timeliness or accuracy of this information. Neither our information providers nor we shall be liable for any errors or inaccuracies, regardless of cause, or the lack of timeliness of, or for any delay or interruption in, the transmission thereof to the user. With respect to information regarding financial performance, nothing on this website should be interpreted as a statement or implication that past results are an indication of future performance.
