The markets continued with their relentless bullish advance last week and so far investors in June see no fundamentals to dull their enthusiasm for stocks.
Markets are always full of surprises but I’m sure an upside breakout is what is expected. The problem is that we are sitting at a triple top at the 2970 price level and we have two obvious H&S patterns as well. In a very bullish scenario that right shoulder would blow its top and the bullish advance would “keep on trucking”.
If investors are just chasing the trend to get back on the bullish bandwagon, then the weak players could be the first to run like chickens screaming the “Sky is falling”.
They don’t even have to run away as a smart algorithm will do it for you. At 2940 the markets would hit another small triple bottom so once it crashes below that, we have a good chance a bigger or longer bearish phase has started.
Of course, a stock crash or “correction” below the 2320 price level brings out all the bearish fundamental news that you can never read because you would be swamped with the amount of bearish news. If they declare their 20% bear market drop has arrived chances are good another bullish phase would start again.
Markets never do what the majority want as that would be simple and to easy.
The commercial hedgers offer no special insight as they are net short by only a small amount.
SP500 soared last week but so has gold, if gold and stocks can soar together they can also plunge together as they did in 2008.
The 2020 elections might seem far away but without a doubt, the public is getting brainwashed by the big political parties already.