Smart Money Is Betting on a Trading Range in the S&P 500
Jani Ziedins | Mar 09, 2023 12:23AM ET
Wednesday turned into a mixed session for the S&P 500.
The index spent most of the day trading modestly in the red as Powell continued testifying in front of Congress for a second day, but a late surge of buying pushed the index into the green, closing up a somewhat trivial 01.%.
While no one is getting excited over a 0.1% gain on the heels of Tuesday’s 1.5% tumble, any gain, even a tenth of a percent, is an accomplishment.
As I’ve been saying for a while, stocks would have crashed a long time ago if this market had been fragile and vulnerable. Inflation remains a stubborn problem that the Fed is still trying to fix, but we’ve been living under these conditions for a year.
At some point, no matter how bad the news, eventually, it gets priced in and stops mattering. And right now, this market seems okay with stubbornly elevated inflation.
Without a doubt, stocks could fall to fresh lows, but we need the headlines to be genuinely shocking and unexpected; simply, more of the same isn’t going to break this market. Until something changes, expect this choppy sideways trade to continue.
Both the bulls and the bears are wrong on this one. We are not racing up to the highs or crashing back to the lows any time soon.
I will reevaluate my outlook if prices crash under last week’s lows, but until that happens, I will continue buying every bounce and taking profits early and often because nothing in this market will last long.
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