The setup here on the last trading day of January couldn’t be much simpler. SPX bounced strongly at the daily lower band and range support at the low yesterday and on the bull scenario SPX now breaks back above the daily middle band at 2031, and on a further break of 2064 we see a retest of the highs. On the bear scenario we see a hard fail here or at the middle band test and, on a break below yesterday’s low, the next big support level is at 1957 at the 50% fib retracement and the weekly 50 MA. SPX daily chart:
Just an end-of-day comment cleaner to quietly acknowledge something I’m stunned I didn’t remember – the tenth year anniversary of the purchase of my company (Prophet Financial Systems) by Investools. I actually missed the anniversary by a few days – – the life-changing event for me was on January 26, 2005 – – but I at least wanted to tip my hat to this very happy occasion and share the final segment of my Prophet series which discusses that final phase in my life at a startup……….
The annoying thing about late stage bull markets and in particular the formation of long term tops is that they take forever to play out. Navigating increasingly volatile swings accompanying the final throws of a dying bull cycle takes considerable amounts of patience, discipline, as well as skill. Like Bob The Horse reminded us the other day: Bear markets go out in a bang and bull markets go out in a whimper.
Now the dirty little secret about early stage bear markets is that the last bear standing is usually a bull. Yes, you read that right. Traditionally it’s not weak handed bears who take down a bull market, it’s simply a lack of buyers. Guess what – all those snarling bears who were printing some mighty coin in 2008 are long gone, wiped out during their persistent attempts to call a top when there was nothing but green candles ahead. I myself have seen their (virtual) faces disappear right here – one by one they simply vanished. The few who survived the ravages of one of the most significant bull markets in history relented and changed their approach just in time before their accounts had melted away like late winter snow in the glows of a spring sun.