The stock market is red hot right now.
The S&P 500 is having its best start to the year in 32 years. On top of that, it has rallied nearly 18% in the past four months, its best monthly streak since December 2010.
One strategist says that even as stocks reach for new highs in the near term, the rally might not be on solid footing further out.
“If we see the breakout above that September high, which was right around 2,941 — if that breakout is confirmed meaning we spend more than just a week above it, then we should see long term follow through on the back of that breakout,” Fairlead Strategies’ Katie Stockton said Tuesday on CNBC’s “Trading Nation” segment.
The S&P climbed to an intraday record of 2,949.52 on Monday — its first record intraday high since September. On Tuesday, the index finished at a record closing high, although it was trading about 4 points from that all-time high level.
Stockton argues that once the index can meaningfully hold above the 2,940 level, which was previously overhead resistance, such a breakout could foster additional momentum.