Price Levels and our 6th Anniversary
This week marks 6 years under the belt for this blog, 6 years backed up by 44 years of pushing and pulling the market string. What have we learned, maybe in first place, that governments are powerful, for us starting with the Nixon price controls in the 1970’s.
At the moment we are seeing a market topping process that is today testing the first market level that CNBC market analysts are keying, 1820 on the S&P. We would view the November 27, 2013 close of 1807.23 as more significant.
The next and more significant level that traders are viewing is the November 13, 2013 low of 1760.64.
Maybe a bigger question is what a longer term market decline fom the recent highs will look like. It probably will not be a reverse of the FED hand holding stair step move up seen since November 2012. So market players are left with two options, 1) no real decline or 2) a precipitous drop. We all know which option the market is leaning towards. From a longer term perspective, most big time market analysts use a 20 percent decline to mark a change in market direction, that is 1480, a level last seen a year ago.
Another level that looms in our eyes is the Septembr 18th high of 1729, a level that we believed was a probable long term high, but the FED made it not so.