S&P 500 looks promising

The inverted fish hook on the S&P 500 looks promising, with a strong blue candle reversing most of Friday’s losses. Completion of an inverted fish hook (normally called an inverted scallop but I find the former more descriptive) requires a breakout above 2190/2200. Completion of the pattern would offer a strong bull signal with a target of 2400, calculated from the base of the pattern at 2000*.

S&P 500 Index

* Target calculation: 2200 + ( 2200 – 2000 ) = 2400

2 thoughts on “S&P 500 looks promising

  1. Moses says:

    Colin … seriously [ lol, 🙂 ] –

    Ignoring this ‘inverted scallop”, can one really offer any other prescriptions to support a robust prospective technical picture for the S&P ; that is, is this what it hinges on ?

    Gold : Why is it not easier to be negative rather than positive, given current US$ / Interest Rate movements.

    Australia: Short-term downtrends since July 2016 seem ominous.

    Your equity ( in general) views over last 9-12 months: Initially bullish, you later changed to a more cautious approach which over last 2-3 months seems to have been – S&P 500 especially – converted to a much more positive view. Yes, when conditions change, one changes one’s view, as a reasonable person ought to do.

    I fundamentally / technically liked your “you changed to a more cautious approach’ much, much more than your current ‘ S&P 500 …much more positive view.

    • ColinTwiggs says:

      You seem to be confusing different time frames. Perhaps I am not communicating this clearly enough to readers.
      Gold. I am bullish because of China’s conundrum when the US raises interest rates. Either they allow the Yuan to fall and risk a major sell-off or they run down foreign reserves to support the Yuan. Either would be bullish for gold. They seem to have opted for a middle path, allowing the Yuan to gradually descend against the Dollar. Rising interest rates definitely increase the opportunity cost of gold but this is only imminent in the US. Elsewhere will take a lot longer and there are many other factors to consider.
      Equities. If the inverted scallop is completed by breakout above 2200, I will take a bullish medium-term view (target 2400) based on technicals. But long-term issues keep me awake at night and I remain a strong bear. Something similar happened in 2007. I turned bearish at the start of the year when the yield curve inverted. But technicals continued to present a bullish outlook until the first strong reaction in August, 8 months later, and the market only peaked in October. Not saying that we are headed for another magnitude 5.0+ sell-off in the next few years but there are serious economic issues that need to be addressed and there seems little political will to take decisive action. They seem to be hoping to “muddle through”.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s