SPX 60 minute chart is wedging up to 1660/1665 area resistance. RSI resistance is above around 50.
S&P 500 60 min.
And the advancers vs. decliners does not seem inspiring.
Advance/Decline
If it gets above 1665 I’ll have to reevaluate.
Erik Swarts makes really nice charts and in this article he draws a parallel between silver’s QE2 blow off and what the S&P 500 is doing now at the behest of QE3. I have noted this staggered correlation before but Mr. Swarts’ charts are just excellent. I noticed his article at Safehaven. Here it is at his blog:
Recall that I thought something was fishy at the time of QE2. Specifically the beautiful inverted H&S that wasn’t in the gold-silver ratio. The GSR was supposed to go up I tell you! Well back then silver got the QE bid, culminating in 2011′s blow off. The GSR got hammered as silver outperformed. Today the US stock market gets the bid and conspicuously, the GSR has risen and broken out of the post-2008 downtrend.
Gold-Silver Ratio weekly
In fact, is that a more massive inverted H&S than the little one that failed in 2010? Is Erik Swarts correct in comparing the SPX with the silver blow off? Yes, but the stock market’s PE is historically moderate and all that cash is on the sidelines! That cash is being beckoned to come join the party; the water’s fine.
This is not likely to prove to have been a healthy time to jump in, in my opinion. Just give it some time and this should prove to be true.
What are the chances that if the pig in the top panel corrects the POS in the bottom panel might rally? Now, will the pig correct?
S&P 500 & HUI, daily
All I can say is that I had a lot of angst in birthing this pig a year ago and now have the same in trying to kill it. I really have got to reevaluate the way I go about viewing momentum and try to be more patient with existing trends and realize that the market that the Bureaucrats have created is prone to extremes before the turns finally come.
SPY daily
It is going to be all the more satisfying when those gaps start filling after this move terminates. But I’ll be poking this thing short going forward and with a risk management style, can suffer 1000 little cuts along the way. Not a big deal. I’ll also trade a few bull stocks that look technically good along the way until everything looks about ready to come out of the oven.
A certain very bearish deflationary seer just issued a certain very bearish alert last week. The market really liked it and ran and ran and ran… because it thinks it knows that decelerating economic data be damned, Dear (Monetary) Leader stands at the ready to support any and all attempts for assets (well, certain assets anyway) to deflate.
S&P 500 monthly
So in contrast to the monthly chart of HUI shown earlier, here we have Forrest, galloping along with those clunky leg braces just flying off in all directions. Forrest just broke something of a trend line. Forrest is over bought by big picture momentum indicators. Forrest is too far above his supportive moving averages.
All I am asking of Forrest is to take a healthy correction. Stop for some Gatorade to refresh Forrest, because if you keep galloping you will stretch all indicators into a blow off. After all, you could take quite a decline and still not cross the moving averages down for a sell signal.
No better yet, I like the excitement. Run Forrest, RUN! Who cares about moderation, anyway?
But then again, I don’t really care about this market because I am not a bull. I have long-term put options against SPY and QQQ. They are there to keep me from out thinking myself on days like today. If I am wrong in the idea that this thing is making a top, well that’s show biz.
S&P 500 daily chart
SPX is trying to get back into the Wedge, MACD is rolling RSI and ROC are on negative divergence, and in the bottom panel NDX (among several other would-be leaders) is leading SPX to where?
The speculation portfolio is 100% cash and with the latest non-follow through and flop in the precious metals (we were right on this in yesterday’s updates), it appears money may have to be made on the short side in the market this summer. If this thing does not get at least a healthy correction this summer to the low 1400′s I’ll have to curse Bernanke and then tip my hat to him.
They don’t get more cut and dry than this chart of the S&P. I am adding short on this Op/Ex day with the index nudged up against a clear cut resistance level. A stop might be the declining short-term moving averages, which are about to cross down (10 below 20).
S&P 500 daily