Investors look at Standard & Poor’s 500 all-time record high as a significant barrier to stock market advances. For the fifth time in the last two weeks, the S&P 500 came within 5 points of its all-time high. It was either dragged by technical resistance or disturbing global headlines.
The news about the agreement to bail out Cyprus banks pulled the stock market down as investors worry about the deal coming apart and the risks involved in it. Investors were also concerned about the comments made by Dutch Finance Minister Jeroen Dijsselbloem who stated that the Cyprus bailout deal could be the template for future bailouts in Europe.
The worry over the Cyprus deal dragged the S&P 500 down as it increased neared its all-time closing high of 1,565.15 that was set on October 9, 2007. Traders follow the S&P 500 more closely than the Dow, which gets more attention from the public. The Dow has made nine record highs in the past couple of weeks.
Sentiment indicators have been volatile. According to the recent survey made by American Association of Individual Investors, 39 percent expect the rally to continue. It is similar to the historical average while the bearish level of 33.3 percent is above average.
A slowdown is nowhere in sight. The market continues its upward trend. Bank of America Merrill Lynch attributes the market movement to a seller’s strike in which investors are waiting for a rollover of money from bond funds into stocks.
