Sell The Rally? – Indexes Find Resistance At Feb 1 Highs
It’s been a nice three day rally since rumors from bond insurer land helped the indexes surge in the last hour last Friday.
S&P took MBIA (MBI) off CreditWatch on Monday and reaffirmed Ambac’s (ABK) AAA rating. Yesterday’s announcement by IBM of a $15 billion buyback led to another substantial up day.
We moved 60 points on the S&P (1330 to 1390), 4.5%, from the lows on Friday to the highs today (S&P 5 Day Chart). That puts us near short term resistance at the Feb 1 highs on the Dow and S&P (S&P 1 Month Chart).
If recent history is any guide, that’s probably it for this rally. And, in fact, after peaking an hour or so ago, the major indexes headed south and are now all in negative territory.