Although it looks like there is a breakout, there is not actually much space available to climb.
At best SP500 could climb 40pts in the next 4 weeks (2%).
If a failure occurs which i believe is likely, SPX could actually fall 200pts (10%).
Note: the config is very similar to july 2007... the market had rallied 18weeks and climbed 15%... plateauing for many weeks and pretending to breakout for 1 week or 2 before it fell 10% .... a repeat would not surprise me.
I I think it will fall. I want it to fall. let's see.
Comments
CosmicDust
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My two cents. Please see chart. Secondary indicators (RSI and MACD) are not looking good, but that does not mean market cannot keep going up (we all know divergence). The rising wedge exhausting point is $250. The market can go up 20% from this point on, or can go down 20%. Judging by the direction of 10 month moving average, the main trend is intact and is up. So I would suggest keep long the market as long as price is still above 10 month MA and above the main trend line. Only to short the market when the 10 month MA rolls over and price is under it and under the main trend line.
AndrewMills
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...very ominous indeed. I agree with this hypothesis. I believe S&P is OVERDUE for a correction, but the FED/Media/Govt complex keeps finding new ways to pump it up.... US QE, EU QE, JPY QE, pushing OIL price down (that was an engineered leverage move by the biggest players).... but at the end of the DAY, everyone knows but is in denial of the fact that this is NOT a robust recovery. If that were the case, the FED wouldn't mean nearly as much to the market as it means... the market HANGS on every next word from the FED. This isn't a free market, it's a 95% owned market by the biggest players, and they move these prices up and down to suit their needs. Anyone who thinks the people at the top would allow FREEDOM to exist in the free market is simply, ignorant. The fact is this: in the 1800's, we abolished slavery... but that didn't abolish those attitudes... it emboldened them! Now those same attitudes enslaved everybody through economics... and the invented fiat currency so they could slowly steal the rug out from under everyone and get the populations over a barrel ... hence, slavery. The EU/Greece fiasco is JUST the beginning of the backlash that's coming... soon Spain, Italy, and many others... including those in the US that have not spoken out yet as disaster has not struck home quite yet... but it's coming. That's my two cents in a nutshell.
Live by the FED, die by the FED. There is a reason the TRUE patriots tried to abolish central banks from the beginning.... how soon STUPIDITY of the education system doesn't teach ethics, principals... it teaches how to be an automaton... F.A. Hayek simply said it best, to paraphrase, "the education system is designed to develop people that will serve the needs of the government."
The next big show to drop will be the Auto loans... just like in 2007 when we gave houses away at ZERO DOWN!!! BUY BUY BUY... we are doing the same with autos... 84 month, 96 month loans... these people will be giving up their cars left and right when the doody hits the fan.
YaKa
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you said it all...
a lot of great news in the last 6 months and.... market is flat at the top.....
ChartArt
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The US stock market is super bullish right now. Sadly I did not post a DOW industrial chart on Monday, February 9, 2015 when I expected exactly this scenario to play out. The past bullish weeks confirmed my theory so far. Here is my comment from 10 days ago:
"It won't go down. We are going to see a large breakout to the upside to far beyond your "game over" red lines. Why? Because everyone thinks this is the top. And they will be surprised that it is not the top. Therefore a lot of shorts will get closed and many people will buy in this new breakout. " (tradingview.com/v/dx8Dhdt8/)
This is still going higher, because the monthly chart is starting a new rally in March, lasting a few months, maybe even until 2016.
IanLip
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"Because everyone thinks this is the top." ... the simplest explanation is usually the right one.
YaKa
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yes... and who is "everyone"? it is irrelevant anyway... on most tops the equation is fairly balanced,
On most important top, it seems the market could go higher... when the top is perfect, the subsequent short is generally limited in magnitude... to balance odds and risks, market has it that good moves are lannched from incomleted stances....
here going to 2130 again would give again that perfect short where even my godson could trace the line and short the market... so no: not happening.
AndrewMills
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in 1929, the stock market was VERY bullish indeed......
Justiceisfalse
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Waiting patiently....
YaKa
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To all of you: please have a look at the VIX 1st and 2nd contract - this is not the behaviour of a trusted breakout...
dhng88
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Hi, today's matket might extend higher due to Greece has requested for loan extension.