The S&P 500 remains in the most persistent state of disequilibrium as measured by distance above Ichimoku Kinko Hyo's Cloud (kumo) since the pair of >21% readings at the Spring and Summer 2011 swing highs - just prior to registering an absolute -21% peak-to-trough decline.
The current pullback toward the cloud remains the shallowest since SPX broke above its weekly cloud: -3.34% v. an average -10.72% over the eight occurrences (qualifying historical criterion: swing high of 10% or greater >cloud where a subsequent higher high occurs) measured.
Comments
imdp
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This makes a lot of since. Each pullback hasn't seemed cathartic. None of the follow through that I look for as reassurance it's "okay to buy." I guess this market has been very frothy for a long time in retrospect. Thanks Andrew!
andrewunknown
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Check out the other 3 most recent charts, covering same study for the period of 1995-2009 between them: tradingview.com/u/andrewunknown/ To put some #s on your point, consider the last 3 pullbacks (including the present one, which there were lots of bottoming calls for on Friday) average 4.86% peak-to-trough. That's is the lowest 3 consecutive PB average across 1995-2013. The lowest such measure 1995-2000 was 6.3%. In 2003-2007, the lowest was just above 6%. So, at -4.86% with momentum s/t oversold, and pervasive calls to "BTFD at the SPX 50-Day", it's a market of "shrugging euphoria" as I call it. Equities have become so imbued with the "default" assumption of a bullish continuation by this succession of hilariously small pullbacks (even on a weekly chart, such as this), the -3.34% dip here seems like a "blood in the streets" contrarian long opportunity. When so many are resigned to "higher" and repeatedly chastened bears with very weak hands are serially cowed into submission in a way they haven't been in nearly 2 decades, something is about to give.
imdp
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Frickin' heavy bro. I couldn't agree more. The techtonic plates are shifting as we speak. It's starting to look like 2008 really was just a tremor. Godspeed