The rally in the SPX that started back in Feb. remains intact. Since the end of the huge QE program
by the Fed in late 2014, the market has been able to achieve only the slightest positive momentum
through a volatile period, and market players with a bent for long positions have had to be content
sucking it up and jumping into the occasional sharp rallies from deep oversold positions. I have not
minded that in the least, but it has been a frustrating and scary period for investors who feasted
on the gorgeous run up over late 2011 - late 2014.
the SPX is moderately overbought on a shorter term price momentum basis and confirming indicators
such as RSI and MACD remain in positive up trends although both are moving into extended territory. SPX Daily http://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=3&mn=0&dy=0&id=p30474770253
The longer term trend, as represented on the chart by the 200 day m/a, remains tilted downward after a hitting a peak in Aug. last year. The rallies in the market have been getting shorter in duration since late 2014, and the sell offs have been very much sharper. Still, with low interest rates and inflation coupled with an economy that is muddling acutely along, there have been those bright spots that hearten traders and crush the shorts.
My capital resource utilization measure has the US economy running flat out with a full head of
steam in the 95 - 100 range. Even though we are in year seven of the current cyclical expansion,
the CRU remains a humble 82 with ample liquidity in the system.
- 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 !!!