The S&P continued toward my target in the 1600 area, in fact I believe it hit the 1.618 Fibonacci move today and could retrace from here. Several indicators of that possibility. It is way beyond its upper Bollinger Band, it is possibly forming its third bearish divergence against the Ergodic momentum indicator, and it has touched and turned back at the top of the up channel as you can see in the chart. Another cautionary item to note is the non-confirmation by the Nasdaq 100 and the Russell 2000, neither making new highs here. Soooo I would make an educated guess that the market will find some reason to pull back from here. Now how big of a correction … I don’t know but May is right around the corner and statistically it has been wise to sell in May and go away. The market is setup for this classic traders almanac rule of thumb, to come true this year. On the other hand, the Fed is a long way from ending its QE so this market is in no way normal. In fact, its an example of the new normal.
4 thoughts on “New Highs (again) on the S&P. Will it ever end?”
I was the one that told you this was going to happen. Quite taking all the credit!
The SPX pulled back today 4/12, as I predicted, about 20 handles to 1579 and tagged support on the daily, 120 minute, and 60 minute charts… so it could easily bounce up again to take another run at the 1600 mark. Either breaking thru definitively and we are off to the races or … failing to breach, forming a double top in which case a more significant correction would be forthcoming.
Whatever will be, will be. We’ll just have to wait and see. But then again, a lot of big investors
are selling. Do they know something? It’s a mystery! And as you say, the market may be an example
of a new normal.
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