The market continues to edge higher, but it is bumping up against a serious wall of resistance. The bright spot is the semiconductors, led by Lam Research (LRCX) today. The semiconductor index (SOXX) is up 19% this year, but as history shows, the index can go much higher.
The chips names, while not as large as Apple (AAPL) and Microsoft (MSFT), are still considered proxies for the economy, giving them longer market coattails.
This morning, I mentioned the market being in a coiled spring. The S&P 500 is at a very pivotal point, which has either been a launching pad, or it has triggered selling. The range of 2780 to 2820 goes back to 2018 as the key swing point.
Here’s why it’s very important this hurdle is cleared quickly. It failed five times last year after meandering too long.
Additional dates that failed:
Overall, I feel good about the underlying fundamentals and all the potential head winds, including the China trade deal – which will get done at some point.
Let’s not force the issue here.
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