SPX: Trade With Caution

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Isn’t it amazing what Central Bankers can do for markets. Case in point is this compressed view of the S&P 500 Index (SPX) in “area” format (monthly chart below). It’s virtually been on a tear since the bleeding from the financial crisis of 2008/09 was abruptly halted with their intervention and injection of monetary support, and it hasn’t had much of a correction since then, relatively speaking.

Purely from a technical point of view, its ascent is beginning to look a bit like the parabolic move that Bitcoin (BTC/USD) began to make in early 2017 and peaked by the end of that year (weekly chart below).

Granted, the SPX is quite a different market instrument than Bitcoin and is much more stable, but I simply thought I’d show a comparison of these two charts, on a purely technical basis, for your information. What you do with that is up to you.

One thing I would point out is that the Momentum indicator (MOM) on the SPX is not corroborating the series of new swing highs that price has made since the beginning of 2018. That’s in line with what I reported in my post of June 29, wherein I described what market gauges I’d be monitoring as price, potentially, approaches 3047. My observations and conclusions remain unchanged.

Bottom line…trade with caution in the coming days/weeks.