The market continued its incessant climb today,
hitting a fresh all time high once again. It seems that nothing can derail this
freight train, or even slow it down. But the SPX is reaching some critical
levels from my point of view, and this could get interesting very soon.
There is not much one can say about today’s
market. The SPX gapped higher to a new all time high, pulled back a few points,
and then moved steadily higher to close at another all time high of 1771.90. I
have been expecting some sort of pullback, but so far none has been
forthcoming. For some time now I have been pointing to 1776 as a minimum level
for the completion of a sequence from the October 2011 low of 1074.77. Things
seemed pretty clear when the SPX reached the 1560.33 low back in June, but
things have been a bit muddled since. After the index reached 1710, and then
fell to 1627, I described an ending scenario that would go something like 1745-1680-1776
to complete the sequence. The SPX fell short of that 1745 level, with the next
top reaching only 1730. This complicated matters, and I began looking at a more
complex end to this sequence. If this current move carries above 1776 this scenario
may come back into play. If the SPX rises above 1796 this becomes a real
possibility. A move above 1776 would also bring one other count into play that
would suggest an end to the sequence from 1074.77.
For the moment it still seems likely that this market
will eventually find a short term top, pullback, and then move to new highs.
But a move above 1776, followed by a move below 1740, could signal a longer
term top has been put in.
FOMC meeting days have been interesting, and this
should be no exception.
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