A NEW STOCK MARKET HIGH IS NOTHING TO WRITE HOME ABOUT, THE SHORTEST BEAR MARKET $DJIA $SPX $SPY $QQQ

New High

S&P 500 made a new high but so far there is nothing to write home about. Let’s explore with the help of a chart.

Please click here for a chart of S&P 500 ETF (SPY).

• This is the shortest bear market in history.
• The chart shows that the new high is only nominal.  It is barely visible on the chart.
• RSI shows that the stock market has lost momentum in the process of making this nominal new high. RSI measures the internal momentum.
• The volume is low. This indicates lack of conviction.
• This is a dismal way to make a new high in spite of aggressive buying by the momo crowd.
• In a normal market, we would be issuing a sell signal based on this behavior.   However this market is not a  normal market.  It is an artificial market driven by excessive money printing and borrowing.  Both money printing and borrowing are likely to continue.
• Moreover there is hope for vaccine which can drive the market higher.
• So far the economic data is coming better than expected.  This may be due to pent up demand.  If that is the case, economic data should weaken going forward.

Bubble Getting Bigger

At this time, the call remains that the bubble is likely to get bigger.

The measured target  remains 3800 on S&P 500  (SPX) or 380 on ETF SPY.  S&P 500 is trading around 3389 as of this writing.

Consider Following What To Do Now And Protection Bands

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