Hey, Ross here:
Before we head off into the long Labor Day weekend, let’s look at a chart that adds to the evidence that we might see a second sustained rally soon.
Chart of the Day
The above chart shows the S&P 500’s August 2022 highs successfully acting as support in both June and August of this year.
When previous resistance becomes new support – that’s another good sign.
I’m still cautious about the market as we enter a new trading month – especially since September has historically not been a good month for stocks.
I’ll want to see the price action play out a bit more before increasing my conviction.
But as we head into the Labor Day weekend, things are looking up.
Insight of the Day
A key trading skill is being able to differentiate between healthy pullbacks and breakdowns.
A healthy pullback is a necessary consolidation to shake out the weak hands before the market moves on to higher highs.
A breakdown is when even dedicated buyers flee the market – causing it to break previous support levels.
Being able to tell the difference between the two is a critical skill.
Reading price action is essential to do this, but you also need to factor in the macro environment – such as corporate earnings, interest rates, and so on.
This skill is what allowed me to confidently recommend multiple double to triple-digit winners all through this year.
So, if you want to make sure you’re 100% prepared for what comes next…
Embrace the surge,
Ross Givens
Editor, Stock Surge Daily
