The Trend is Your Friend Until It’s Not (Which May or May Not Be Soon)
US S&P 500
The market has given reasons over the past year for why it might be ready to top and drop, but throughout 2019 there were only moments when price action hinted that a trend-turn might be possible. “Might be” – that is the key. There could be reasons, but price needs to corroborate those reasons. Whether it’s a fundamental factor like historical extremes in valuations (which can go on for a while, as we have seen) or a technical consideration such as eroding breadth (i.e. small caps severely lagging vs large caps or FAANG no longer leading), until the tide turns there isn’t a great risk/reward in betting against rising prices.
S&P 500 Weekly Chart (Chart 4)
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---Written by Paul Robinson, Market Analyst You can follow Paul on Twitter at @PaulRobinsonFX
