By Lawrence G. McMillan
The S&P 500 index has extended its gains, as we expected after last week’s breakout over resistance at 4170.
The target was the declining 200-day moving average, which is currently at about 4325. The S&P /zigman2/quotes/210599714/realtime SPX -0.30% did “touch” that 200-day MA this week. Furthermore, the downtrend line that defines this bear market (blue line on the accompanying chart), is also in that same area.
Since there are several overbought conditions currently, SPX may have trouble breaking through that resistance now. A close back below 4170 would be a negative development.