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S&P 500 Index Reaches All Time High - 1530.23 at Trader’s Narrative





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Finally! The S&P 500 finished the day at 1530.23 - an all time high. Everybody was watching this level as it had been the line in the sand, drawn more than 7 years ago:

SP500 new all time high 1530.png

index at new high pop cork.pngOn March 24rd, 2000 the S&P 500 reached an intraday high of 1553 (red circle above). And for the next few months kept trying to go higher but each time it was pushed back.

In hindsight we know this level to be the last bull market top and the blow off of the internet bubble of 2000.

The interesting thing to note is that not only did the S&P 500 put in a very strong performance today, it did so in the face of some seemingly bearish cross-currents from China. Overnight, the Chinese authorities tripled their stamp tax on stock transactions in another attempt to cool the mania surging in their stock market. The Shanghai market dropped almost 7%. The last time China sneezed like that, we caught a cold (February/March 2007).

But now? We seem to have developed an immunity.

I find it still supportive that so many people, even active traders and investors, are in denial of what is right in front of their quote screens. I’ve already covered how the retail “Mom’n'Pop” investors are simply not interested. But I’m seeing much of the same from many experienced, knowledgeable market participants. They simply do not want to believe this is a bull market.

Which is more the reason why it is. And more reason why it has some ways to go.

Finally, we may very well see the market correct from this level and go into a range bound contraction as it digests the resistance. That would only be natural. In the medium to long term though, I think we are headed higher.

As I wrote yesterday, on that time horizon, it is foolish to bet against the house.

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2 Responses to “S&P 500 Index Reaches All Time High - 1530.23”  

  1. 1 Ryan

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    “I find it still supportive that so many people, even active traders and investors, are in denial of what is right in front of their quote screens. They simply do not want to believe this is a bull market.”

    I love this comment. From August 2006 to April 2007, I was convinced the stock market, and in fact the global economy, was about to collapse imminently. I lost a lot of money in the process, repeatedly believing those that once again had called the “market top”. What turned me bullsih was how the markets shrugged off the Feb 27 decline.

    My basic theory is this. Since about 2005, the markets started to price in the well known fears: debt, trade deficit, housing boubble, oil, geopolitics, money growth, inflation, carry trade, you name it, any of which were about to bring apocalyptic collapse at any moment. Slowly, slowly, it is realised that none of these fears are actually materialising, or if they are, like the housing bubble, the fallout is actually not as bad as was feared. What is happening in the markets is that what I call the “fear discount” is being unwound. That’s why the markets keep going up on low volume, but occasionally jolt back down on high volume, as once in a while one of the old fears rears its ugly head again. I believe without any major disruptive event, if the fear discount gets completely unwound, we could easily be looking at S&P 2000 and DOW 20000 in 2008.

  2. 2 Babak

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    Ryan,
    been there done that :-) lol so I know what you mean. That’s why I try very hard now to base my bias on a confluence of data, indicators, sentiment, etc. Not just “because”. No one knows the future, but right now, the things I’m watching are all flashing a green light.

    Maybe the market is looking around the corner and seeing something we can’t right now. Who knows?

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