A close at current levels would be an all-time high closing level for the S&P 500 and the market is just 3 points from the intraday record high of 1730.45.
It’s interesting to note that the Sept 19 record high was set one day after the surprise decision not to taper. At first the market was excited about continued printing but on second thought traders began to wonder why the Fed wasn’t tapering and began to worry about a weak economy and the political risks.
The political fears turned out the be well founded and we still have a murky picture of the economy.
Could we see a repeat?
Here we are, one day after a deal on the fiscal impasse. There market is excited about a deal and the likelihood of a continued non-taper. The risk is that the market begins to focus on the reasons the Fed won’t taper — a weak economy — and the damage from the shutdown. Even worse, corporate earnings have been spotty. IBM is down 6.5% today and EBay is down 3.5% and warning about holiday sales.
Let the technicals decide
There are risks but there have been risks to the stock market since 2008 and it’s been a non-stop rally. The market has proven, time and time again, that it can rally on multiple expansion alone. That’s the trend and if the S&P 500 breaks the record high, bet on that trend continuing. If it flounders here (right here) be cautious.
SP 500 daily
