S&P Rising Wedge Nearing An End

I have been quiet for a couple months now.  I’m sorry I haven’t been consistent in posting Daily Readings, or any other material for that matter.  Life has been a bit hectic, and the market has been fairly uninteresting as it seems stuck in an unsustainable liquidity-driven zombie-like march higher.  There are enough warning signs that I can’t bring myself to jump on this runaway train, but there aren’t any indications that a breakdown is imminent yet either.  And so I wait.  And watch.  At some point I will make a very large short bet.  Here is the 20 year weekly chart.  The last four years are a steep rising wedge that ends this summer.  Moneyflow has been steadily declining over the last 3 years, creating a bearish divergence.  The S&P is approaching the old high’s from 2000 and 2008.  The coming weeks and months should be interesting.

2013-03-08-ES_CHARTS

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  1. Draft
    March 8, 2013 at 7:31 pm

    This is a great chart. It’s a bit hard to tell on the chart (zooming just makes it pixelated) — what would you say the next wedge support is (and when), and the final top? It seems like the next wedge support is around 1440 or so, but I’m not sure when (this month? next?), and then if we bounce up to the tip of the wedge, that’ll be around 1580 in June. Does that match what you’re seeing?

    • March 11, 2013 at 11:39 am

      Draft, thanks for your comment. Today, I posted a shorter term chart that hopefully gives you a better look at where I have trendlines running. Wedge support is currently around 1465 or so, as I see (though it can certainly be subjective as there have some violations of both the top and bottom trendlines)… and yes, a 1580ish mid-summer high seems plausible if there were to be a small sell-off followed by a final push higher. That said, as I commented in today’s note, I have so little faith in the honesty of the market that I am really just spectating at this point. I don’t trust the market enough to wager much at the moment.

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