Time to zoom out and take inventory of the big picture. More twists and turns will surely happen, but it helps to have a plan and some signposts along the way.
Seems like an eternity that I've been advocating for wave 5 to carry us to new all time highs (ath) for SPX. So many headlines and changes in sentiment have shaped the market's path in 2018. Tariffs, interest rate fears, Italian government anxiety, North Korea summit meeting, potential wage inflation, FRB quantitative tightening (QT), emerging market and China's market declines, World Cup favorites exiting. Well, there is good news ahead. The World Cup ends in July.
Despite all of the above SPX has meandered along and found support in higher lows with each passing attempt by Bears to pull it down. The long path to new highs is taking shape, and recently held support is now allowing for higher prices. On a technical basis signs point to new highs, whether using Fibonacci levels, trend line support, improved Advance/Decline levels, MACD, investor sentiment readings (contra) or Elliott Wave projections, or all of them. Taking inventory of the big picture from a technical perspective provides comfort from headlines and daily media accounts of financial events. Staying focused on what matters provides comfort and confidence through whatever the next series of headlines are in the weeks and months ahead.
So what can go wrong? Navigating the short term provides us with risk and reward. Non-linear price movement shapes profit and loss if not managed carefully for short term activity, while longer term investors can simply assess their relevant impact. For the near term the peak at 2801.90 on 3/13/18 is a hurdle to clear. The lower hurdle at 2740 area mentioned in last week's chart has been eclipsed, for now.
As always, timing matters. The FRB's QT in June is now behind us with the next set of events scheduled for late July, followed by a couple of in August. The path is less obstructed near term, but those subsequent QT events will make it difficult for prices to move higher. We'll take inventory of the size and speed of prices moves in July to guide expectations for month-end and August. I'm more convinced that the uncharted QT process has introduced periodic shifts in market prices. Time will tell, while caution and attention are recommended.
Seems like an eternity that I've been advocating for wave 5 to carry us to new all time highs (ath) for SPX. So many headlines and changes in sentiment have shaped the market's path in 2018. Tariffs, interest rate fears, Italian government anxiety, North Korea summit meeting, potential wage inflation, FRB quantitative tightening (QT), emerging market and China's market declines, World Cup favorites exiting. Well, there is good news ahead. The World Cup ends in July.
Despite all of the above SPX has meandered along and found support in higher lows with each passing attempt by Bears to pull it down. The long path to new highs is taking shape, and recently held support is now allowing for higher prices. On a technical basis signs point to new highs, whether using Fibonacci levels, trend line support, improved Advance/Decline levels, MACD, investor sentiment readings (contra) or Elliott Wave projections, or all of them. Taking inventory of the big picture from a technical perspective provides comfort from headlines and daily media accounts of financial events. Staying focused on what matters provides comfort and confidence through whatever the next series of headlines are in the weeks and months ahead.
So what can go wrong? Navigating the short term provides us with risk and reward. Non-linear price movement shapes profit and loss if not managed carefully for short term activity, while longer term investors can simply assess their relevant impact. For the near term the peak at 2801.90 on 3/13/18 is a hurdle to clear. The lower hurdle at 2740 area mentioned in last week's chart has been eclipsed, for now.
As always, timing matters. The FRB's QT in June is now behind us with the next set of events scheduled for late July, followed by a couple of in August. The path is less obstructed near term, but those subsequent QT events will make it difficult for prices to move higher. We'll take inventory of the size and speed of prices moves in July to guide expectations for month-end and August. I'm more convinced that the uncharted QT process has introduced periodic shifts in market prices. Time will tell, while caution and attention are recommended.