I've been discussing 4300 since covering shorts and getting bullish in late March/early April.
Fast forward here we are two months later. 4200 really didn't offer up much resistance. 4300-4350 is a different story, however. The high for Friday's trading sessions was 4290. We are now entering the zone.
It's not just the generational resistance that comes into play at 4300-4350, going back quite a few decades, it is also a long-term supply area as shown by the following charts of the SPX and NDX.
The exact levels the SPX is testing now are where the breakdown in the market emanated from in 2022. Markets have a memory. That memory includes jaded investors who held through the entire scary, Fed induced, macro laced market of the past 18 months.
Those investors will be creating supply as the SPX moves back above the breakdown area.
To be clear, there is enough emerging demand that they won't be able to tank the markets, but they can grind things to a screeching halt for the time being. A few other factors coming into play, like a spike in yields, has the potential to turn things ugly for a period during the first few weeks of June.
Same thing with NDX, supply area ahead.
The NDX broke down from this price level in early 2022, retested it shortly thereafter and then fell into oblivion for a time.
This becomes a natural resistance area where supply comes into the market for a time.
It's not just this resistance that is in play up here, however. In this weekend's edition of Turning Points I shared 11 charts pointing to now being the time to be conservative, at the very least, with long positioning.
An important week ahead technically. Let's see where it takes us.
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