After the better than expected employment report out Friday, there are key index levels to focus on. Investors should continue to focus on the more important technical event developing within equity markets, the rotation toward oversold/bottoming cyclicals.

1) Market Key Index Levels: Friday the SPX was pushing above short-term resistance at the March 4 bounce highs of 3130. Next resistance is at 3259, 3328 then 3394. Support levels are 3100, 3006, 2934.

What would suggest the rally is slowing? Short-term momentum indicators remain positive but a 1.48% decline by the SPX would be needed to suggest the rally is decelerating. My expectation is that any pullback will likely be shallow, short-lived and an opportunity to continue building equity exposure, given the improving longer-term and intermediate-term trend and cycle backdrop currently in place. For some stock names, please see pages 3-4.

2) Style rotation – The intermediate-term trend of Growth vs Value has been well advanced above its 3-year trend for many weeks but is now showing evidence of mean reverting. Nevertheless, there is insufficient technical evidence at this point to signal this move is a much longer-term reversal. Simply, catching up to the 40-week sma and/or linear uptrend will meaningfully impac...

Unlock this article with a FREE 30-Day Trial!

An FSI Pro, or FSI Macro subscription is required in order to access this content.

*Free trial available only on a monthly plan

Disclosures (show)

Get invaluable analysis of the market and stocks. Cancel at any time. Start Free Trial

Articles Read 2/2

🎁 Unlock 1 extra article by joining our Community!

You’ve reached your limit of 2 free monthly articles. Please enter your email to unlock 1 more articles.

Already have an account? Sign In

Don't Miss Out
First Month Free