S&P 500 Technical Analysis As Markets Trade At All-Time Highs

The S&P 500 is trading at all-time highs as the end of September 2024 approaches. The Federal Reserve has cut 50 basis points and the institutional and mainstream media spin is that there is no chance of a recession now. Multiple times it has been said on the big financial news outlets that that Federal Reserve has engineered a perfect landing for the economy.

While that may be true, investors should remain skeptical. Historically, when the Federal Reserve starts cutting rates, the markets fall. So it may be too early to proclaim victory. Another data point of interest is that the yield curve has just un-inverted. History tells us that within 3-6 months of the yield curve un-inverting, recessions hit. There are countless other stats that scream caution, but cautious investors don't dive into the markets at all-time highs, giving institutions exit liquidity.

From a technical analysis standpoint, the S&P is actually into a major trend line of resistance. If you connect the 2021 high (before the 2022 bear market) to the high in July 2024 (before the August flush), the trend line its being tagged by the S&P 500 now.

Technical traders should watch this level closely. Should price get above and confirm, then further upside is possible. However, based on technical analysis, there is a solid probability of a pull back.

Whether the Federal Reserve has engineered a perfect landing or not is unknown. We will need to revisit this same question in 6-12 months to make that determination. Be careful of the mainstream media and institutional spin being put on things, there are always other motives.

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