Finally Breaking 2500

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After a memorably boring four day range consolidation Tuesday through Friday last week, SPX finally broke up and tagged 2500 at the close on Friday. This should follow through to the upside, short term at least, and I have some targets to watch, and a warning that this move over 2500 may well not last the week.

On SPX the obvious trendline target is rising wedge resistance, currently in the 2514 area, and a strong match with rising wedge resistance on the ES chart. On the daily chart (not shown below), there is a possible RSI 5 / NYMO sell signal brewing, but the negative divergence is slight and might well be lost on a green close today or tomorrow. SPX 60min chart:

170917 SPX 60min

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Equities in Real Money

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Using good old SlopeCharts, I thought I’d do a little experiment. As you know, stocks are at lifetime highs, but in nominal terms. I wondered what things look like in terms of “real” money (as measured by GLD), so I entered the symbol (SPY/GLD) and got this result:

slopechart_(SPY-GLD)

What jumped out me is that, in these terms, we are actually lower than we were in the pre-financial crisis peak! In addition, the ultimate low for the market wasn’t the famous March 2009 bottom, but instead took place a couple of years later (which makes sense, if you look at bank and financial stocks, which plunged until then). Food for thought.

Stocks and Gold; Macro Pivot Window Upon Us

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On August 11 the potential and reasoning for anticipated pivots in the US stock market and the gold sector were noted in this article: Potential Pivots Upcoming for Stocks and Gold

As for the stock market, several reasons were put forward in support of a 2nd half of September through Q4 danger period, for a correction (no need yet to talk bear market because that would be pure promotion of an agenda). Please note that standard technical analysis was not among those reasons. The stock market was then and is now, in an uptrend across all important time frames.

The reasons for the correction view noted in the article ranged from the S&P 500’s 30 month cycle, to the Fed’s Funds cycle and its proximity to the 2yr yield (this has not yet made a bear signal) to the US dollar’s potential to rally (still waiting on that one) to a rough seasonal patch that begins in mid-September. Well, today is September 15, da boyz is back from da Hamptins and the rest is up to the market’s nature to take its course. (more…)

Just the Equifax, Ma’am

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Since it turns out that the woman in charge of information security at Equifax was a music major with no technology background………

…….the company has had its reputation permanently tarnished and wiped out billions of dollars of shareholder value within days. Some folks I’ve spoken with think it’s heading for the single digits. My opinion is that the company has really screwed the pooch on this one, but maybe, just maybe, it’ll find some temporary support around $90 or so, as I’ve drawn here:

0914-efx