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Lawrence G. McMillan

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April 15, 2021, 12:49 p.m. EDT

How to prepare for a possible S&P 500 sell signal

By Lawrence G. McMillan

The current rally in the S&P 500 index continues to roar away, and – despite some severe overbought conditions – the bullish momentum remains strong. Moreover, there are not yet any confirmed sell signals among our indicators. 

The rally has been so ferocious that there isn’t a tested support level in sight. The most recent support level is at the 3990 level, which was the March highs. One might try to make a case for support at 4075-4080, but really that was just a pause in this current rally and not a tested support level. 

With the S&P /zigman2/quotes/210599714/realtime SPX -1.89% currently at 4140, it’s about 150 points above support. That is a long way, and even a modest correction could cover that distance quickly. Even so, the SPX chart will remain bullish as long as the next support level, at 3850-3870, continues to hold.

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