The S&P 500 just sprinted through a key indicator as Wall Street cheers the rollback of tariffs
The 90-day pause on most tariffs between China and United States took the worst case scenarios off the table for Wall Street and spurred a rally that smashed through a notable milestone for chart watchers. The S & P 500 rose 3.3% on Monday and closed well above its 200-day moving average. That level had been seen as a potential ceiling on the market rebound by skeptical strategists. The strength of the move on Monday means that busting through the 200-day looks like just a footnote in what has become a rapid rebound for the market. "This is an example where the fundamentals and the technicals intersected at such an aggressive level that the traditional analysis is tough. ... This is to me more supply and demand of shares technical than it is necessarily levels here and levels there," said Mark Hackett, chief market strategist for Nationwide. The fact that stocks continued to add to their gains throughout the day suggests there was significant buying from institutional investors who were either short or underweight the market, Hackett said. "We blew through the 200-day, we blew through the previous resistance levels, and we're not weakening through the day. The CMT 101 is you blow through the 200-day and then you settle back on top of it. The fact that that's not happening tells me that this caught people off guard more than we are giving it credit for," he added. CMT refers to chartered market technician, which is a certification for technical analysis held by many professional strategists and fund managers, including Hackett. The rally could take out another milestone this week, as the S & P 500 is just one more push away from turning positive on the year. The index is less than 1% below the mark of 5,881.63, where it closed on Dec. 31.
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