- So far in the last 6 months, all tops are aligned.
- The progress from top to top has been 6%, i.e. 1% per month (matching the log speed limit since April 2010.
- Each re-attack upside is faster but has so far always been retained by the same capping line.
More verticality without effect?
Scary for shorts but not healthy for longs.
In any case, it seems to me this line is likely to hold, therefore, in 6 months. SP500 should be capped at 2210.
Locally: progress should be capped at 2110 until mid January15 if there is resilience without breakout.
When the market was at the beginning of the movement in 1200-1500 200 points was very good. Now such a strong move can be difficult to grow. Reduction in liquidity will show an additional signal for the fall.
Giankee, trust me I recognise the ability of the market to go up over time but also i observe what speed tend to cap the progress.
It is not easy for sure... Past does not explain future... therefore dont get fooled what you saw.... I think it will go higher but i think there will be higher volatility... the smooth trend is probably coming to end.. there will be decent correction and rallies too.
We have an SP500 that is able to do 40pts many days in a row.
So moving 200pts is theoretically possible over 15days.
so for end of January: 2280 or 1880?
2280 - Proba: 1%
1880 - Proba: 20%
But most bullish environment are just pain trade... there is 40% probability to be at 2110 mid January.. another 1.5% up that is rewarding those who hold without fear.
I can easily defend a short even I have the impression to be wrong a little bit every day for 6 weeks and I shall see 2085 after that excess.
Conversely, defending a long can quickly become a blood bath. if below 2050 this month.
Anyway: the skew between risk perception and the actual path could be the killer here. While short, i prefer to acknowledge this.