Wednesday, February 06, 2013

So it's come to this...

In the long run, it was inevitable that both the S&P 500 index and Dow Jones Industrial average would return to the important resistance levels of their all-time highs.  I just didn't think it would happen this soon.  The Dow 30 has now reached the vicinity of 14,000 for the second time in history,

Dow 30

while the S&P 500 index has poked above 1,500 for the third time.

S&P 500

If I had to place a bet at this point (fortunately I don't) I'd say the stock market has finally reached a price too far and is poised to reverse course for a while, but I'm still staying in neutral cash for now.  If these two indices jump above these lines significantly, meaning the stock market has reached a general all-time high by any definition, then the last long-term resistance line will be out of play, and I would be hard pressed to make a bearish argument from the perspective of a price trend.