SPX: Clearly overbought. A correction is still imminent

SPCFD:SPX   S&P 500 Index
SPX has faced a very long, quick raising trend. The Raising Wedged didn't break with a pull back, but to the contrary with a second raising wedge on the upside.
A normal raising wedge would break up on the downside with a pull back correction. But we do hevae a raising wedge within a raising wedge .
This is the outcome of too optimistic political statement about the state of play with regard world economy, ECB announcement of a possible European QE which contradict with the first political statement that economy is well. But market has bought excessively the announcement.
Now there is almost no more buyer in the market and the buyers will soon have to leave the floor for the sellers.
If you do compare in generale the power and the speed of the growing Bull market and a Bear market, we generaly go in a more slow motion upwards, and we do fall down very quickly on the downside.Therefore, based on the power of the sellers, we may face a smooth correction towards 1880, or a rather normal "typical" sale in May mood which menas that the correction may be very much towards 1790 or a real change of trend which means around 1680-1650. Now we have to wait and see.
But the tradition of Sell in may buy in September appears to be one more time dead, or at least null and non void, because of the situation of the market. Do not forget that the market is biased because of the virtual imput such as FEd's QE , or the intervention of Central Banks such as BoJ, ECB and others.
Therefore we are not in a normal competitive market like we use to be between 1990 and 2004 but rather in a market where Central Banks are heavily making interventions. Therefore natural and mechanical forecast became rather more difficult. But don't forget that at the end of the day, market and traders are making the market despite everything. ;-)


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