Upside limited to 2%.
Another touch on the upper line would be too obvious/perfect.
If a touch was to happen, it would be probably a trap and it would go higher.
At P/E of 20, there no real reason to have this asymptotic rally and the local data is not supporting it.
- it may wise to factor non multi completion to the top line.
- If SP500 manages to close 2040, it may open down.
- If it opens down, there are 2 targets:
SP500 reaches 2150 but is very likely to come back here.
short 30% here at 2107
short 30% at 2150 and remove 30% at 2128...etc...
Once the move down is launched (that requires a close below 2040 in weekly), count 4 weeks from the top.
July07 correction: 4 weeks
Aug11 crash: 4 weeks.
it shows sp500 adjusted for inflation when looking back and the Earnings on the same chart.
As you can see:
- SP500 is just marking a new top versus 2000 and 2007 was a lower top.
- The pricing is similar to 2007 in PE terms.
- In 2007 earnings marked there top in Mar07 a few months before the SP500 did in price.
- Here the earnings may have marked their top in Aug14... Gudance is not that great.. they could start to fall on the next earning batch.
-That was true of the Jul07 correction which lasted 4 weeks and ended mid aug07
- That was true of the crash of Aug11 that started the 7Jul11 and ended the 8th of August.
So for sharp corrections, i have look for windows of 4 weeks.
BTW: when a corrections is launched, if it manages to last 4 weeks, i seriously start to look for reversals.
BTW: that was also true of the last correction in Oct14. from 19sep to 14oct...
Time is more constant in patterns than price progress.