The markets have made an impressive move over the past four weeks; but I remain concerned and watchful of a fading Counter Trend Rally, which would result in further declines.
The market hit an all-time high July ’15 and has since rolled over with lower highs and lower lows culminating in progressively deeper troughs on August 24 ‘15 and February 11 ’16. This week’s peak puts the S&P500 back to the August/September ’15 double bottom buy point, hardly anything to get exuberant over. That counter trend rally eventually failed (peaking in six weeks) and I expect this one to fail too. I have no idea if we’re in a failing Counter Trend Rally…but if we were, this is what it would look like. (see below chart)
I suspect the trading range of the S&P500 is likely 1850-2020. Between those levels, everything is simply “noise”. My thoughts haven’t changed since recording this podcast on February 27, 2016: http://www.wealthsteading.com/176/
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