Out-of-Cycle Note: Levels to Watch Into Monday
Navigating 6250
Quick note before the weekend—this isn’t a risk-off alarm or anything urgent.
I’m heading away with my family for the weekend and will not have access to much technology, so this week’s Sunday letter will be issued Monday morning before markets open. Same format, just one day later.
In the meantime, here are a few thoughts as we head into the end-of-week session:
At the end of June, I described the current strategy as autopilot: hold long exposure until the data changes. That data being trend, breadth, momentum, sentiment, and positioning.
So far, nothing has changed.
0 of 3 risk-off signals are active
Breadth has stayed strong since April, with more stocks making new highs than new lows on most days
Momentum remains positive
And trend support offers good risk management
In the immediate term there are two key levels I am closely monitoring: 6200 and 6300.
6200: Recently tested and held as support. The 20-day moving average is quickly rising and should soon align with this level. A close below 6200 would be the first real sign of potential weakness.
6300: The next breakout level. If the index closes above, the move likely continues higher. (The aggressive bear participant will look for signs of a failed breakout). As noted in recent Sunday letters, the 6300–6500 zone is one to monitor closely for potential topping patterns and to secure partial profits.
On positioning: the NAAIM Exposure Index shows managers pulled some gains midweek.
Sentiment, via the CNN Fear & Greed Index, sits at 76 – Extreme Greed. With the S&P 500 opening down 0.4%, 6253 at the time of writing.
Disclaimer: The information in this article is for informational purposes only and should not be considered financial advice or a recommendation for any investment. I am not a financial advisor, and the content is not intended to serve as financial advice. It is solely intended to journal thought, ignite more thought and discussion.