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S&P 500: Is 4,600 Finally Too High?

By Jani ZiedinsStock MarketsAug 01, 2023 04:06AM ET
www.investing.com/analysis/sp-500-is-4600-finally-too-high-200640532
S&P 500: Is 4,600 Finally Too High?
By Jani Ziedins   |  Aug 01, 2023 04:06AM ET
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The S&P 500 is pausing under 4,600 as it continues proving all of the cynics wrong.

Too high or not high enough? That’s the million-dollar question.

As high as stock prices feel at 4,600, people were making the same argument at 4,500, 4,400, 4,300, and even 4,200, and we know how that turned out.

S&P 500 Index Daily Chart
S&P 500 Index Daily Chart

At the same time, while high is more likely to get even higher, all good things eventually come to an end.

As a nimble trader, I don’t have an allegiance to either side in this debate. The run to 4,600 was a good one, but rather than greedily hold for higher prices, I collected worthwhile profits and got ready for the next trade.

The market resolved to the upside at 4,200, 4,300, 4,400, and 4,500, and if we see the same thing at 4,600, I’m more than happy to buy the next breakout.

But until this actually starts rallying, I’m content sitting on my pile of profits on the sidelines. At this point, I’m looking at 4,600 as a tipping point. Either we keep going higher, or we don’t.

If the rally resumes later this week or next week, I will buy back in. But if the market is finally ready to take a break and cool off, I’m happy to short the step back to 4,400 support.

Rally up to 4,700 or slip back to 4,400; it doesn’t really matter to me what happens next. All I’m doing is waiting for the market to reveal its hand, and then I’m jumping on that trade.

Start small, get in early, keep a nearby stop, and only add to a trade that’s working.

Get above Friday’s highs, and I’m a buyer. Fall under Monday’s lows, and I’m going short.

S&P 500: Is 4,600 Finally Too High?
 

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S&P 500: Is 4,600 Finally Too High?

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Comments (8)
Syed Viquar Ahmed Quadri
Syed Viquar Ahmed Quadri Aug 01, 2023 1:00PM ET
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For Long Term SIP in VALUE STOCKS.  Investors may not worry.   Journey of market thru its life always frighten when it is high but eventually always made NEW HIGHS.  AFTER FACING HURDLES even after COVID market rose.  NOW THERE IS NO SUCH ALARMING SITIUATION.  I PREDICT S&P TO GROW BEYOND 5000 AFTER MAKING SOME PROFIT BOOKING. I STAY INVESTED
John XYZ
John XYZ Aug 01, 2023 11:14AM ET
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If core CPI continue to drop, 4600 is not too high.
Aug 01, 2023 10:51AM ET
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Even if there is a crash, history has shown us that stocks only go up…
ECL SALES
ECL SALES Aug 01, 2023 8:20AM ET
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Good
OldFng Guy
OldFng Guy Aug 01, 2023 7:56AM ET
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Nothing is too high. It's been scientifically proven that stocks only go up.
Djamshid Bakiev
AMMM Aug 01, 2023 7:38AM ET
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you've already reached a "God" level in trading
Otis Grant
Otis Grant Aug 01, 2023 6:26AM ET
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Short term traders don't get Dividends or compound their assets
Aug 01, 2023 6:26AM ET
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👆this right here!
Arnaldo Gonzaga
Arnaldo Gonzaga Aug 01, 2023 4:37AM ET
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👌
 
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