S&P 500: Is 4,600 Finally Too High?
2023.08.01 03:07
The is pausing under 4,600 as it continues proving all of the cynics wrong.
Too high or not high enough? That’s the million-dollar question.
As high as stock prices feel at 4,600, people were making the same argument at 4,500, 4,400, 4,300, and even 4,200, and we know how that turned out.
S&P 500 Index Daily Chart
At the same time, while high is more likely to get even higher, all good things eventually come to an end.
As a nimble trader, I don’t have an allegiance to either side in this debate. The run to 4,600 was a good one, but rather than greedily hold for higher prices, I collected worthwhile profits and got ready for the next trade.
The market resolved to the upside at 4,200, 4,300, 4,400, and 4,500, and if we see the same thing at 4,600, I’m more than happy to buy the next breakout.
But until this actually starts rallying, I’m content sitting on my pile of profits on the sidelines. At this point, I’m looking at 4,600 as a tipping point. Either we keep going higher, or we don’t.
If the rally resumes later this week or next week, I will buy back in. But if the market is finally ready to take a break and cool off, I’m happy to short the step back to 4,400 support.
Rally up to 4,700 or slip back to 4,400; it doesn’t really matter to me what happens next. All I’m doing is waiting for the market to reveal its hand, and then I’m jumping on that trade.
Start small, get in early, keep a nearby stop, and only add to a trade that’s working.
Get above Friday’s highs, and I’m a buyer. Fall under Monday’s lows, and I’m going short.
