Saturday, April 20, 2013

Rallying past the record - or not?

The S&P 500 index record closing price of 1565 held for more than five years since October 2007.  Then on April 10th the S&P shot up to a record close of 1587, looking like it might be a decisive start to a rally.  However it stayed flat for the next couple of days, and then on Monday - an April 15th which will live in infamy - the S&P fell back to earth to close at 1552, accompanied by the largest one-day decline in the price of gold in decades.

If you're wondering what the stock market is going to do next, then join the club.  We're "due" for a modest correction soon, and sentiment is still leaning towards optimism, which is bearish.  However other indicators, such as volatility and volume-related metrics, are still bullish.  Hopefully the market will pick a direction soon and pull most of the indicators into agreement one way or another, at which point a more confident forecast may be possible.

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