by winston » Tue Apr 22, 2025 11:30 am
Stocks are likely headed higher in the short term
by Jeff Clark
Conditions are oversold enough to justify a rally towards the upper end of our 5,400-5,500 target zone.
In fact, I can make a case for higher levels if the rally happens fast enough. But I don’t think we have any chance of getting above the 50- and 200-day moving averages near 5,750.
The closer the S&P gets to 5,750 the better the odds for adding short exposure.
Ultimately, the index will need to retest the 4,835 low, and more likely, break below that level.
For the next few days, I am leaning bullish. But, with one eye glued to the exit sign.
A rally to 5,750 would mean we’re in for another 12% climb based on where the S&P trades.
Assuming that happens, the subsequent fall to 4,835 (and potentially, beyond) would mean a 16% drop.
As long as 5,200 holds, on a closing basis, I favor an upside move over the next few days.
If the S&P closes below 5,200, then the odds favor a retest of at least the 5,000 level, and possibly an immediate retest of the recent low at 4,835.
I am leaning mildly bullish for the week. That will change if the S&P closes below 5,200.
For now, though, sentiment is so poor, and the daily technical indicators are starting to turn bullish. So, I tend to think we’re due for a quick pop higher before we get a retest of the recent lows.
So, all eyes on whether the S&P closes above or below 5,200 today.
As noted earlier, 4,150 or 4,100 is Jeff’s predicted bear-market low. That would mean a 29% fall from where he thinks a relief rally could top out (5,750).
If you're holding stocks long all the way through that, that could spell a little bit of trouble.
But if you take advantage of opportunities where you get deeply oversold conditions, where you can get into a good bounce – play that bounce.
But be quick to take your profits off the table and then allow the market to come back down again and give you another opportunity…
Bottom line is, I think there's going to be an awful lot of opportunity to trade.
Source: Jeff Clark Trader
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
