Markets Fail at Resistance

(6/2/22) Markets sold off after Fed Governor Bostic walked-back his comments about a potential Fed pause later this Summer, which markets interpreted to mean a more aggressive Fed in hiking rates and reducing liquidity. The hope for a kinder, gentler Fed policy had been fueling markets. The good news is that markets are still on a "buy" signal, and the MACD is still positive. But markets still remain in an over-sold condition. Higher future this morning are suggesting a bit of a rally, right out of the gate...but sustainability of said rally will be paramount. The not-so-good news yesterday was that markets failed at a resistance level that goes all the way back to February of this year. As markets grind higher, they'll be eating up the buy signals in the process, limiting upside somewhat. Because prevailing sentiment remains bearish, that will give a bit of a lift to markets as some investors are caught in a short squeeze on some positions. We think this continues to be a sellable rally. Our strategy remains, as markets work through multiple levels of resistance, to use the opportunity to sell laggards and raise cash.

Hosted by RIA Advisors' Chief Investment Strategist, Lance Roberts, CIO
Produced by Brent Clanton
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