Here's Why It Will Be More Difficult For The S&P 500 To Again Breach 2,800

by Charley Blaine

The will start the trading week only 2.03% below the 2800 level. But that’s not where many analysts expected the benchmark index to be after it hit that peak early last week.

The expectation last Monday was that by now the SPX would be trading above the psychological level and moving toward new highs. The S&P has hit 2,800 four times between Oct. 17 and Feb. 25, but dropped back each time. A solid move above 2,800 would be a signal for a potentially sizable move higher, possibly even to new records.

SPX Weekly 2016-2019

Instead, on Friday the index finished a rocky day, -0.21%, sealing its worst weekly performance so far in 2019 after a five-day losing streak left it down 2.15%. The and also declined every day last week, ending the week lower by 2.2% and 2.46%, respectively.

So how likely is it that we’ll be seeing that key level breached this week? A five-day losing streak or longer doesn’t occur that often, after all. Rarer still is when all three major averages drop in tandem for five straight days or more.

The last time that happened was over the nine days before the 2016 presidential election. However that was followed by the S&P surging 41% until peaking at 2,941 in September. That rally was triggered by Wall Street’s bet that a President Trump meant a huge corporate tax cut.

This time though, given both the political and economic landscape, the situation may well be different.

Last week’s selling was mostly due to investor unhappiness fueled by concerns about the lack of details as to what a U.S.- China trade deal might look like, after multiple reports said a deal was imminent. Add to that economic worries after the European Central Bank

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