The S&P 500 will top at 3250

Discussion in 'Trading' started by volente_00, Dec 28, 2019.

Will the S&P top at 3250 and pull back 9.23% ?

  1. Yes but it won't reach your 9.23% pullback

    2 vote(s)
    6.5%
  2. Yes and it will reach your 9.23% level of 2948 SPX

    4 vote(s)
    12.9%
  3. No way, Trump is taking this sucker to 3400

    17 vote(s)
    54.8%
  4. Who cares you are still early to the top

    8 vote(s)
    25.8%
  1. Cuddles

    Cuddles

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    #411     Mar 10, 2020
    volente_00 likes this.
  2. volente_00

    volente_00

     
    #412     Mar 11, 2020
  3. piezoe

    piezoe

    I have not read through this thread, so forgive me if someone else has already pointed this out. I want to comment on a technical detail. When the market (S&P) topped at 3393 it was nearly 10-15% (I have it 13%) above the long term S&P Channel reckoned from the 2009 March low (666). Even an ordinary 10% correction would have been needed to bring it to near the top of the channel. We have had so far an ~20% correction of the Feb. high. That has brought the S&P only to the mid point (~2750) of the S&P channel. In the meantime, we have some evidence of peak earnings having been put in -- April may provide confirmation. On top of that we have yield inversion, a virus which is not yet under control, and a collapse in oil prices. A further drop by say late May, or much sooner, seems quite reasonable to me.

    Once these factors are taken into account, the recent precipitous drop in the market should not be viewed as either unexpected or as irrationally large, despite what financial industry talking heads may be saying. Let's never forget that as nominal market index values grow over the decades the points dropped in corrections will grow also. The Media loves to report the nominal numbers when it's the relative numbers that are important. And in the very long run -- well, long run, 'in the very long run we are all dead' -- what matters is the market relative to real economic growth.

    This S&P Channel is more important than many realize. The S&P needs to be near the bottom of its channel to reflect something close to economic growth. The market is of course irrational far more of the time than it is rational. Because markets anticipate the future the are nearly always trading at large premiums over what can be rationalized with real economic growth.
     
    #413     Mar 11, 2020