SPX insanity continues - but don´t celebrate too early
- SPX currently at the magical line of 5k
- an asset trading at new ATHs is never bearish HOWEVER there are some warning signs that a diligent investor should be mindful of:
- market breadth extremely weak - a handful of (tech) stocks are responsible for almost all of the recent gains in SPX
- general sentiment at euphoric levels
- 8 biweekly green candles in a row (circled) do imply bulls, at some point soon, are going to face exhaustion
- March FOMC is likely the one where FED decides to start cutting the federal funds rate which, as it happens, happened in 2000 and 2008 as well
At the moment, the bulls still have everything under control but should they lose 4750 it is likely going to be lights out for a long time - at that point the odds shift tremendously in the favour of the bears and towards a new stock market bear market.
The first after 14 long years of upside.
- an asset trading at new ATHs is never bearish HOWEVER there are some warning signs that a diligent investor should be mindful of:
- market breadth extremely weak - a handful of (tech) stocks are responsible for almost all of the recent gains in SPX
- general sentiment at euphoric levels
- 8 biweekly green candles in a row (circled) do imply bulls, at some point soon, are going to face exhaustion
- March FOMC is likely the one where FED decides to start cutting the federal funds rate which, as it happens, happened in 2000 and 2008 as well
At the moment, the bulls still have everything under control but should they lose 4750 it is likely going to be lights out for a long time - at that point the odds shift tremendously in the favour of the bears and towards a new stock market bear market.
The first after 14 long years of upside.
We may be at the beginning of an AI bubble.