Financial Iceberg

FINANCIAL ICEBERG

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TECHNICALS

SP500 Macro Technicals: Late at the Party: Break Out or Fade ?
May 11 ( From Tradeview )

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The Situation

We have been in one of the most Bullish Stock Market in history since 2009.
The Mighty SP500 Index from a low in March 2009 of 666.79 to the closing
on May 8 2015 at 2116.10 rose by a factor of 3.17 spurred by low interest
rates and strong buybacks from US corporations.

But lately, the Mighty SP500 start to be a laggard among their main World
Indices as you may see in the Charts below.

From the Nikkei to the DAX and the Hang Seng Index, even the FTSE 100
recently, they all made Break Out. In fact, the SP500 is seriously late
at this party...

The main reason for that underperformance of the Mighty SP500 Index is the strenght of the US Dollar Index which broke out, like the Nikkei in September 2014...

Will SP500 Index break or fade ?

Well the answer will be: need to first break a tiny daily rising wedge at 2117 before thinking the huge break out at the 2162 level for now.... Also the Dow Jones Transport is in a seriess of Lower Highs but NOT Lower Lows yet since the peak price reached on November 28 2014. See Last Chart at the bottom...

But the most interesting factor is the correlation between the Mighty SP500 Index with the US Dollar Index (DXY). And we are into the zone where we usually at risk to see a short term market downleg as history suggest. ( See last chart below at the bottom - vertical lines )

Louis Pasteur
"Chance favors the prepared mind."