Is This a Double Top or are New All-Time Highs for the S&P Going to Happen Again?

Tom Gentile

Posted in
Big Picture

By: Tom Gentile
February 16th, 2024

3 mins read
Figure 1: 90-day Candle Chart SPX closing price 2024-02-15
Figure 1: 90-day Candle Chart SPX closing price 2024-02-15

As of now, this one day later which is Friday 2024-02-16 shows SPX closing at 5,005.57 as of the time of this writing which is just after the closing bell for Friday.

Right now, ahead of the three-day weekend SPX is trading at resistance making for a double top for now.

It might have traded higher if the markets weren’t closed on Monday in observance of President’s Day, but it seems investors / traders aren’t putting that much money to work with an extended weekend upon us.

Bears weren’t really out in full force either,  The S&P 500 ended its 3-week winning streak, but the markets did not dramatically sell off to end the week.

The Double Top Chart Formation

A double top in any chart no matter the security is considered a resistance level. It means the security hits a price point and stops trading higher at that price point: It ‘resists’ trading higher hence the term ‘Resistance.’

It could result in that security rolling over and trading down in price, it could trade in a sideways range at that resistance price, or it could break out, trade above the resistance price, and continue a bullish price move.

Figure 3: Double Top Formation on AAPL 
Figure 3: Double Top Formation on AAPL 

To Federal Reserve Open Market Committee Will Either Cut Rates or Not

I am hearing the hotter than expected inflation numbers released this week have cooled expectations for a rate cut in March.

Should inflation still run hotter than the Fed would like to see that could potentially put a damper on a cut in May or June. Towards the end of last year and in to this one some were saying a rate cut in June is more of a conservative view of when the first cut will come.

I am even hearing now from some camps that they wouldn’t be surprised if there will not be any this year.

Anything can happen with the economic numbers so while no one is certain about whether the Fed will cut or not this year, we may be in an upcoming period of volatility.

As a trader of options that is fine by me as I know how to trade options in either direction. The key is being able to read the charts and gauge the directional bias to trade options successfully. If volatility kicks in and the market starts to chop back and forth, we have options strategies to take advantage of that price action too.

Enjoy your 3-day weekend and know that I am not necessarily bullish or bearish. I will tell you I am focused on being prepared for the market topping out or breaking out here.

Keep reading and studying me and I will do my best to educate you on what I see and how I am trying to take advantage of what I see.

Tom Gentile
C1P: Chief 1-Percenter

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