Erik McCurdy's  Instablog

Erik McCurdy
Send Message
Erik is the senior market technician for Prometheus Market Insight and has been performing chart analysis since 1995. The software program that he developed to monitor long-term stock market trends has correctly identified 92% of the cyclical turning points in the S&P 500 index since 1940. His... More
My company:
Prometheus Market Insight
My blog:
Prometheus Market Insight
  • Stocks Close At New Bull Market High 0 comments
    Jan 30, 2013 4:30 PM | about stocks: SPY, DIA, QQQ

    The following article was originally published on January 29, 2013.

    The S&P 500 index closed moderately higher today, moving up to a new long-term high for the cyclical bull market from 2009. Technical indicators are bullish overall on the daily chart, strongly favoring a continuation of the advance. However, the short-term uptrend from November is moving higher at an unsustainable rate and it will likely be followed by a potentially violent overbought correction.



    (click to enlarge)

    The last short-term signal issued by cycle analysis was generated when the short-term cycle low (STCL) formed in late December. Since then, the S&P 500 has moved sharply higher, reconfirming the bullish translation that has persisted since the previous low in November.



    (click to enlarge)

    As always, short-term price behavior only has meaning when analyzed within the proper context afforded by the long-term view. At a current duration of nearly 47 months, the cyclical bull market from 2009 is overdue for termination and it is highly likely that the next cyclical top will form this year.



    (click to enlarge)

    The previous long-term top in 2007 was a prototypical example of a cyclical trend inflection point and chart analysis correctly predicted its development while it was in progress. The bull market from late 2002 accelerated into a final, speculative blow-off phase in 2006, after which a classic double top formed in 2007. Given the magnitude of the rebound off of the low in 2011, it is likely that the current bull market has entered its speculative, terminal phase.



    (click to enlarge)

    Given the historic amount of government stimulus that has been introduced during the last three years targeted specifically at risk assets such as stocks, it is highly likely that the violent market behavior of the past several years will continue during the development of the forthcoming cyclical top. Therefore, be prepared for more extreme moves in both directions across all time frames during 2013. As always, diligently applied chart analysis will identify the long-term top as it develops, but the topping process will almost certainly be an unusually wild one.

    We will identify the key developments as they occur in our daily market forecasts and signal notifications available to subscribers. Try our service for free.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: SPY, DIA, QQQ
Back To Erik McCurdy's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers


More »

Latest Comments

Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.