The S&P 500 has broken above 1950, a key resistance level which should now provide support. The next level of resistance is 2000. If the S&P 500 is able to get above this level it will then have a good chance of moving higher to trade in the 2040 to 2135 range that dominated most of 2015. Given the weak fundamen- tal backdrop, it is going to be hard for the S&P 500 to break above its all time highs set last year at 2135. Nevertheless, in the next month and a half, up until the beginning of May, the S&P 500 should be able to
move higher in the short-term.
We are fast approaching the unfavorable six month period for stocks, which starts on May 6th. At this point in time, it is difficult to determine if the S&P 500 will finish its seasonal run early, or if will continue with strong momentum into May. The strength of the earnings and the stock markets reaction should provide some clues. Currently, it is better to give the S&P 500 the benefit of the doubt to move higher, especially if it is able to move and stay above 2000.