Special Risk Capital Management LLC

Market at Resistance Level=Caution April 17, 2021

April 16, 2021 – This will be a short and to the point post since the current trend continues (i.e. Bullish). But . . . two items to consider: First, we are now at the previous high and so the 14107 level becomes a point of price resistance. If prices move confidently above that level then we’ll have a better feeling that the trend higher continues. Note chart below.

Second, we are now beginning to hit the major portion of the first quarter earnings. As mentioned before, this market is “priced for perfection” and any significant disappointments in major companies will have an effect on the overall trend. So in both cases it’s a good idea to watch earnings news carefully over the following 2-3 weeks.

I am also concerned (just a little) that volume is lower and the Sentiment indicator (at the top of the chart) is mildly Bearish.

The Short Term Sector Strength table is shown below –

Of note is the recent strength in Healthcare and Utilities. Both could be considered as defensive sectors for mutual funds that are required to be 100% invested. I am 65 to 80% invested and I’m seeing fewer nice “breakout” candidates to spark new investment. Let’s see how the market react next week. Do they blow through resistance or back off? That will give us an idea about overall strength.

Take Care and have a good week. …………. Tom …………

Price chart by MetaStock; pie chart & table by http://www.HighGrowthStock.com. Used with permission.