So far this is merely a pullback from a consolidation, and a likely distribution top in the making as insiders continue to take profits on their ponzi pump in US equities.
We signalled 'defensive' last week, and that the risk reward in the market was dangerous, and we exited or hedged all longs. Time to Get Defensive
Now we wait to see if this is just a pullback from a consolidation, with a subsequent rally to new highs, or a break in the market slightly ahead of our forecast target. We have been looking for a 3% pullback first, and then a rally to the final high for the year.
The obvious level to watch is the neckline.
Bear in mind that these 100 million dollar men on Wall Street make their pay by taking investors, and the economy, for rides up and down in stocks, commodities, and just about any other market they can push using the leverage of their taxpayer supported funds.
The SP Weekly Chart show that a rally back to 1014 on the cash market represents an approximate 38.2% rally from the bottom. This number is one of the key fibonacci numbers watched by traders. The next stop higher would be 50%.
“A nation can survive its fools, and even the ambitious. But it cannot survive treason from within. For the traitor appears not a traitor; he wears their face and their arguments, he appeals to the baseness that lies deep in the hearts of all men. He rots the soul of a nation, he works secretly and unknown in the night to undermine the pillars of the city, he infects the body politic so that it can no longer resist. A murderer is less to fear. The traitor is the plague.” Marcus Tullius Cicero