After the SPX fell to 1542 on 4/18, a new, supercharged postive move was started to
add to the decently strong rally in place since 11/12. The sharp trajectory of this new leg up
coupled with the mild erosion of trading volume suggests a blow off move where poorly
disciplined traders flat chase stocks higher as prices are marked up steadily ahead of them.
So, we have a well defined powerful advance which has grown progressively overbought
and more rowdy. Just to give you a feel for how this advance has gone, there is 6 month trend
support all the way down at the 1580 level and longer term cyclical trend support down around
1470. Thus, there could be a correction as large as 12% without a violation of the primary longer
run trend. SPX Daily Chart
- Peter Richardson
- Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!