Could Thursday, April 11th Really Be The 2013 Spring High For S&P500?

|
Includes: SPY
by: Tom Bergerson

It is no secret that in each of the last 3 years, the S&P500 (NYSEARCA:SPY) has made an intermediate term high in the late spring followed by a correction. The S&P500 recently made its intraday high on April 11th, a Thursday, at 1597.35. It has since traded down, correcting for 7 days with a magnitude of -3.839% top to bottom.

In 2010 the intraday high occurred on April 26th, a Monday, at 1219.80. The correction lasted until July 1st when the intraday low was 1010.91. The duration was then 66 days - or just more than 2 months - and top to bottom was of magnitude -17.125%.

In 2011 the intraday high occurred on May 2nd, a Monday again, at 1370.58. There were secondary highs July 7th, a Thursday, at 1356.48 and again on July 21st, also a Thursday, at 1347. The correction lasted until October 4th when the intraday low was 1074.77. The duration from high to low was then 155 days - or about 5 months - and top to bottom was of magnitude -21.583%.

Finally in 2012 the intraday high occurred on April 2nd, a Monday yet again, at 1422.38. There was a secondary high on May 1st, a Tuesday, at 1415.32. The correction lasted until June 4th when the intraday low was 1266.74. The duration was then 63 days - or almost exactly 2 months - and top to bottom was of magnitude -10.942, relatively minor compared with the prior 2 years.

In all 3 years the highest high was put in on a Monday. But there is a significant difference between these 3 years and 2013. In 2010 and 2011 markets were anticipating the termination of QE rounds at the end of March and June respectively - terminations that had been previously communicated by the Fed. In 2012, there was no such anticipation, although the first round of maturity extension known as Operation Twist was anticipated to end in June. In 2013 there is no such anticipation of the end of QE as the Fed has announced in September and December 2012 that its current round of asset purchases is -incredibly- unlimited in temporal duration.

Will Thursday April 11th be the intraday high for 2013 followed by some magnitude of correction? That it occurred on a Thursday would be out of character with the 3 previous years, though that does not mean much. The Fed is still doing $85 Billion of asset purchases monthly. That might mean more. Tread lightly.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I may initiate a short position in S&P500 e-mini futures within the next 72 hours.