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S&P 500 Rallies To New All-Time Highs – Are The Markets About To Break Higher?

Stock-Markets / Stock Market 2021 Sep 05, 2021 - 10:04 PM GMT

By: Chris_Vermeulen

Stock-Markets

The S&P 500 rallied to new highs early in September after the US Federal Reserve statements indicating continued support of the US economy and easy money policies.  It appears the markets have fallen back into bullish trending mode which may continue throughout September and into the end of 2021 through the Christmas Rally phase.

Q3:2021 Earnings & The 2021 Christmas Rally Are Pending

Although we can see a new, more moderate, price trend taking place on this S&P 500 (ES) Weekly Chart, below, we are starting to see a new rally phase setting up as traders push prices higher to close out Q3:2021 in expectation of continued strong earnings.


With the US Fed directing the markets and providing a backstop against risk, it would take a broad market panic to change the trend in our opinion.  Q1 and Q2 earnings in 2021 were moderately strong with Technology and Healthcare showing very strong revenues. This is likely to continue into Q3:2021 and drive traders into long positions ahead of the October Q3:2021 earnings announcements.

Be sure to sign up for our free market trend analysis and signals now so you don’t miss our next special report!

Additionally, we are starting to see the volume trail a bit lower on these Weekly charts.  We do believe certain institutional and retail traders are starting to pull some profits off these lofty levels as a measure of pure greed.  After such a strong rally from the COVID-19 lows, anyone who has ridden this rally upward would be foolish not to pull some profits from these high price levels and balance their accounts in preparation for the potential Christmas Rally phase.

MidCaps Still Struggling To Break Into Bullish Trending

Conversely, the S&P 400 MidCap (MC)sector is still attempting to rally towards new all-time highs.  Recently, we’ve seen the MC move in a decidedly bullish price trend after the July 2021 lows.  The sideways rotation/consolidation that has taken place recently suggests a momentum base may be setting up.  If the MidCaps rally to new highs after basing for the past four months, it is very likely that this sector may see a strong rally into the end of 2021 – possibly lasting into early 2022.

The S&P 400 MidCaps and the Russell 2000 have been consolidating for quite a while.  The primary bullish trending has been happening in the NASDAQ, S&P 500, and DOW JONES as traders focus on the Large Cap and Technology/Healthcare sectors.  Real Estate and Retail have also been moderately strong lately.

If we start to see a rally in the S&P 400 MidCaps, this will present fairly strong confirmation that a broad market rally phase is taking place – which is much different than what we’ve seen recently.  The Large Cap rally was, in our opinion, driven by strong earnings capabilities and traders chasing strong trending.  Meanwhile, the MidCap and Russell 2000 traded sideways/downward as it was perceived these sectors didn’t have the same upward price capacity as the Large Cap indexes. 

If the MidCap Indexes really start to move higher while the Large Cap indexes continue to trend higher throughout the end of 2021, we may be starting a very broad market Christmas Rally phase that could be very profitable for traders/investors.

Overall, unless something breaks this trend and global traders continue to pile into the US equities markets seeking opportunities, we may find the MidCaps and Russel 2000 sectors are uniquely positions for a strong 8% to 12%+ rally throughout the end of 2021.

Please take a minute to learn about my BAN Trader Pro newsletter service and how it can help you identify and trade better sector setups.  My team and I have built this strategy to help us identify the strongest and best trade setups in any market sector.  Every day, we deliver these setups to our subscribers along with the BAN Trader Pro system trades.  You owe it to yourself to see how simple it is to trade 30% to 40% of the time to generate incredible results.

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Have a great day!

Chris Vermeulen
www.TheTechnicalTraders.com

Chris Vermeulen has been involved in the markets since 1997 and is the founder of Technical Traders Ltd. He is an internationally recognized technical analyst, trader, and is the author of the book: 7 Steps to Win With Logic

Through years of research, trading and helping individual traders around the world. He learned that many traders have great trading ideas, but they lack one thing, they struggle to execute trades in a systematic way for consistent results. Chris helps educate traders with a three-hour video course that can change your trading results for the better.

His mission is to help his clients boost their trading performance while reducing market exposure and portfolio volatility.

He is a regular speaker on HoweStreet.com, and the FinancialSurvivorNetwork radio shows. Chris was also featured on the cover of AmalgaTrader Magazine, and contributes articles to several leading financial hubs like MarketOracle.co.uk

Disclaimer: Nothing in this report should be construed as a solicitation to buy or sell any securities mentioned. Technical Traders Ltd., its owners and the author of this report are not registered broker-dealers or financial advisors. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. Never make an investment based solely on what you read in an online or printed report, including this report, especially if the investment involves a small, thinly-traded company that isn’t well known. Technical Traders Ltd. and the author of this report has been paid by Cardiff Energy Corp. In addition, the author owns shares of Cardiff Energy Corp. and would also benefit from volume and price appreciation of its stock. The information provided here within should not be construed as a financial analysis but rather as an advertisement. The author’s views and opinions regarding the companies featured in reports are his own views and are based on information that he has researched independently and has received, which the author assumes to be reliable. Technical Traders Ltd. and the author of this report do not guarantee the accuracy, completeness, or usefulness of any content of this report, nor its fitness for any particular purpose. Lastly, the author does not guarantee that any of the companies mentioned in the reports will perform as expected, and any comparisons made to other companies may not be valid or come into effect.

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