The S&P 500 is kicking off the month with a high-volume test of the 200-day moving average.
The ends and beginnings of months are usually a time of portfolio adjustments for funds.
We’ve expected the 200 DMA to be tested, as mentioned on previous posts.
But now that we see a gap on the charts made with today’s leap higher on the open, we expect it to be filled – sooner or later.
Watching breakouts is key now.
Recent new-highs on stocks like STAR, SXCI and FUQI need to stick for us to have confidence others will follow.
The broader market may pullback. But a in a truly strong market these breakouts will hold.