Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
I just went back to look at Bollinger bands on the S&P 500 the past few years – I mentioned we crossed over the top Bollinger band at the close Tuesday. This was the first time during the rally from December that has happened. Looking back at the last similar period (September 2010 – February 2011) of this type of strength (the QE2 or David Tepper rally) the S&P 500 only crossed over the top Bollinger band for two days in early November 2010. That led to the only real correction of that period, a drop from ~S&P 1225 to 1180, immediately thereafter.
It 'feels' like a similar desperate moment for anyone betting against this market – there appears to be nothing that stops this market to the upside, and we are now on the 3rd day over the upper Bollinger band. It is a quite remarkable run here, and certaintly extremely atypical. Not much more to say because at this point saying anything negative is simply a boy crying wolf.
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