New All-time Highs?

S&P 500 Index’s (SPX) failure to record new all-time highs last week prompted some to worry the March-present rally is slowing and a major top may be developing into the seasonal weakness period from September to October. On Monday, 8/17/20, SPX briefly flirted with its all-time of 3,393.52 (2/19/20) trading to an intra-day high of 3,387.59 before closing at 3,381.99.

While there is important resistance hovering near the all-time high (3,387.59) and the explosive 54% rally from the March 2020 Covid-19 pandemic low places the stock market at an overbought level the market tape still suggests new all-time highs are possible.

Historically, we have noticed that whenever the large-cap US stock index is trading less than 1% from its new high, this milestone will soon be surpassed within a couple of weeks, on average. With expanding market breadth, favorable price momentum, and constructive technical patterns we would not be surprised to see SPX and other key large-cap US indexes set new all-time highs into the end of the summer to early fall.

So, the question then becomes – how high is high?

Attached are short-term technical charts of the S&P 500 Index (SPX), Dow Jones Industrial Average (INDU), and the NASDAQ Composite Index (COMPQ) as well as the projected near-to-medium term technical targets.

Source: Courtesy of StockCharts.com

Source: Courtesy of StockCharts.com

Source: Courtesy of StockCharts.com