Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
Yesterday I mentioned two inverse head and shoulder formations – the first off the mid November lows that took the market to the level it had its first meaningful correction of the year in mid February -albeit a short and quick one. The second being the mini pattern we are currently in that measures to the mid 1560s. There is a third as well; one I’d call the mother of them all *if* the S&P simply explodes right through this mid 1560s-low 1570s area; and that is the one using the September highs as the left shoulder and the area the market stalled at for a week in January as the right. See below:
This one takes the S&P to a target of 1605-1607.
Speaking of which Jim O’Neill of Goldman Sachs (soon to retired) aka the father of the BRIC nomenclature, is out on Bloomberg today saying there would need to be an acceleration to “ridiculously strong levels” in economic activity in the U.S. for any meaningful move over 1600. Granted that is arbitrary but just another viewpoint. As for the bulls, rest assured Alan Greenspan says there is no irrational exuberance ala 1996!
Last Tom DeMark who was incorrect about the market rally ending about a month ago, said this week there is an even stronger cadre of indicators for the S&P 500 to top out at 1676.40 (exactly) – this time there are daily, weekly, and monthly exhaustion indicators all coinciding at once. So we’ll see if QEinfinity makes that a moot point as well.
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