If it’s true, I’d say bonds are (finally) positioned for a meaningful, sustained fall. I am particularly interested in the similarity of price action vis-a-vis the long-term Fibonacci fan lines.
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Yesterday I was talking about the strong resistance overhead and what I was talking about was rising megaphone resistance from the 2011 low. That should be strong resistance now and in fact is even stronger than it looks, as on the monthly chart that resistance trendline is anchored at the 2009 low. I am not expecting that resistance line to be breached, with the possible exception of a bearish overthrow, until this rising megaphone has broken down and made target at a fib retracement in the 38.2% to 61.8% fib retracement range.
That’s not to say that SPX couldn’t rise further within this pattern, the pattern is rising by about 20 handles per month and would end this year in the 2350 area, I’m just saying that with strong resistance now in the 2120-30 area, and rising at only 20 handles per month, there can be no strong trend up move that would start here and last more than a couple of weeks. To get that sort of move SPX needs to retrace further to create some headroom, and ideally test or break rising megaphone support, now in the 1865 area.
Well, folks, I’m spoiled by Springheel Jack’s morning posts. He’s been M.I.A. for two days now, and, well, the ol’ blog is pretty content-free at the moment. You’ll need to talk amongst yourselves for a while until I get my act together.