The S&P 500 slipped 0.2% on this first Monday back from the Thanksgiving-affected week.
Not much is going on in the financial press, and a little give-back following last week’s modest 1% gains is not a surprise. Big money was not involved last week, and institutional investors often undo what the little guys did when they were on vacation.
The first few sessions after a major holiday are usually slow, and I’m not expecting anything interesting before the second half of the week at the earliest.
That said, it is constructive to see the index hold the majority of recent gains. If this market skating were on thin ice, Monday’s selling would have accelerated, not stalled after a fairly inconsequential loss.
At this point, most owners are comfortable holding for higher prices, and the resulting tight supply is keeping a floor under the market.
The longer we go without retreating, the more real these prices become. (But as always, we can’t take anything for granted, and the next wave of fearful selling is never more than one bad headline away.)
The market is behaving well near 4,600 resistance, and acting like it wants to test this level before doing anything else.
Calm markets are bullish, and the path of least resistance remains higher, but I’m not excited to hold all of the risk underneath us for another 20-40 points of upside.
That means I will keep watching this develop from the sidelines after collecting big profits before the Thanksgiving break.
But if this strength persists and we are setting up for another pop-through in overhead resistance, I will be happy to jump back in. But we’re not there yet.
Smashing through 4,600 resistance or getting rejected by this level, it doesn’t matter what the market does next as long as it does something. We will learn a lot about the market’s mood in the second half of this week.