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.
-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.
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.