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Market Projections for May 1, 2023

The big question: sell in May and go away? 

In this case… that’s a solid, er, uh, kindera, maybe, not sure???

One of the underlying concerns in the analysis we do has to do with technical and fundamental analysis. While fundamentals are the more traditional way to evaluate an investment, technicals (primarily the study of price, volume, and trend) can provide insight into the behavior of market participants.

When technical and fundamental data both seem to ‘agree’ with how an investment is behaving, we view that as a good sigh. When the don’t agree, we view it as a sign it’s time to do a deeper dive and seek more understanding.

Then you have now… a time where technicals, fundamentals, and about every which way you look at it, you can make a case for why things should get better, or why the world should end.

To be clear, we don’t think the world is ending. But we do think this is a darn hard time to make heads or tails of things.

The markets seem to agree. While technical behaviors have shown this market to be resilient, the ‘under the hood’ metrics continue to cause pause.

Major indexes with a weighting to tech have enjoyed a solid recovery in 2023. However, more broadly diversified indexes (like the Russell 2000) have faired much worse. This suggests we have more work to do before we can signal an ‘all clear’ for the markets. (As if there is ever really an all clear signal…. ha.)

This week is no exception. Last Friday’s strong rally ended the week on a strong note. The question is, can the momentum continue?

Futures looked pretty flat at the open. And it appears JPMorgan is going to ‘buy’ the remnants of First Republic bank.  So, at least for now, a 2008.2 is still being staved off. 

The technicals suggest the SPX will look to break through the February highs and challenge 4200 this week. Trying to read too much more into the long-term of the figures is probably fruitless.  

So, we’ll turn the page. 

Technical supports/resistant for the SPX appears to be about 4195/4088 for the week.

Stay tuned!

S&P 500 Projections: 

SPX support and resistance estimates for 5-1-23
SPX over-bought / over-sold indicator for 5-1-2023
SPX trend relative to VIX index 5-1-2023

Posted 5/1/2023… charts created prior to market  open

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