Back to 2,100

The S&P 500 Index is back up against the 2,100 level, and once again, it is acting as firm resistance. During each of the past two days, the S&P 500 was above this level at the highs, but eventually closed beneath this important psychological level. Think about this, going back to August 2015, the S&P 500 was above this level on an intraday basis 20 times, but only 8 times did it close above 2,100. Not to be outdone, the S&P 500 has closed at 2,099 on 9 occasions in the past 18 months. No other close has occurred more often at the single point level.

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So, 2,100 is a big level—what could it take to finally break above that area? Momentum could be the answer. The S&P 500 gained +2.3% last week, for the best weekly gain since early March. Going back eight months, the returns after a weekly gain of more than +2% have been very strong. As you can see here, five of the last six times the S&P 500 gained more than 2% during a week it was higher the following week and two weeks out. The returns two weeks out are very strong, with a median return of +1.8%. Now, it is worth noting the one loser was a huge 6.7% drop at the start of the year.

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Let’s take another look at the chart above. The returns when the S&P 500 was between 2050 and 2100 were rather weak. On the flip side, when the S&P 500 was beneath 2050, the near-term returns were strong. With the S&P back up near the top of this range, it could suggest a breakout will be tough.

 
For other potential market drivers in June, see this week’s Weekly Market Commentary.

IMPORTANT DISCLOSURES

Past performance is no guarantee of future results. All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.

The economic forecasts set forth in the presentation may not develop as predicted.

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The S&P 500 Index is a capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

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