Looking back over SPX monthly chart for the longer run, there have been few MACD negative
crossovers during the past 20 years. SPX Monthly When they have occurred, the market has
either corrected meaningfully or entered a full blown bear. There is nothing biblical here, only
that negative changes in momentum have tended to involve follow through. Since the MACD
can whipsaw, there is no gospel here, only a possible red flag to keep in mind.
The monthly SPX chart shows what we already know, namely that the bull market in force has
been losing momentum for well over a year. The primary fundamentals that I use to view the
market suggest the bull may have entered a transition period from its reliance on the Fed's QE
as investors and traders try and gauge how well the market will hold up in a less generous
liquidity environment where progress of the real economy as it bounces back from the west
coast port strikes and bitter winter weather may or may not be hefty enough to have the Fed
signal Its intentions regarding the ZIRP policy less ambiguously.
- 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 !!!