The market made a steady move from mid-May into June which ended within 1% of all-time highs on June 9th. From there, volatility entered the market again over concerns about the Fed’s decision on interest rates and whether or not the U.K. would leave the European Union when they vote next Thursday.
Though it would be expected to see volatility continue for a few more days based on the uncertainty of Brexit, it was a positive sign yesterday to see the market make a major intraday reversal. After being down for a sixth day and about 170 points at the low, the market reversed over 260 points and, from negative to positive. Strong intraday reversals are often an indication of a near term bottom.
Though the timing is not predictable, we expect the market to eventually break the resistance at S&P500 2100. It has challenged this area about five times since the high of around 2135 in May of last year. We expect that breaking through this heavy resistance level will add some short term momentum to the market. Yes, short term volatility but, we remain bullish intermediate to longer term.