Most of the indices are trading at or near new all-time
highs, but caution is always warranted as any severe drops
could happen -- although they would probably be short-lived.
Last Monday's action illustrates just such a case, as the
markets gapped down, and stayed down all day long, but the
selling was orderly and contained. "Turnaround Tuesday"
brought along a powerful reversal, which brought the marekt
back to where we were the week prior. See the chart below,
but I cannot see anything in the way of this market moving
higher outside of any exogenous events.
The oscillators are overbought and could be taken lower, but
that may set up yet another huge buying chance (like there
was in early February). The S&P 500 (SPX) chart shows prices
well above many moving averages at this time. With few
catalysts, we could see the market just going sideways and
consolidating -- especially with the Market Volatility Index
(VIX) so low and no expectation of big movements (currently
at 14%). A 3%-4% pullback from the current level to the area
circled would not be a surprise.
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