SP500
The context
The SP500 is up 10% this year. Put aside a significant drop under 1,820, the index has done nothing but going up since the beginning of the year. It's a secret for nobody, the SP500 is at historical record levels, and breaking new records almost everyday. If you open a monthly chart, the index has significantly retraced only twice during this incredible climb from the lows of March 2009.
Everybody has their opinion on this incredibly bullish market. Some think it's the result of the Fed's massive Quantitative Easing plans (that have now ended), others think it's because the US economy is doing good and that stock prices are not overvalued. I'll probably write a dedicated post about my personal opinion, but trading-wise it is of no importance. The truth is that SP500 is going up and showing no signs of tiredness. Some people will "warn" you of a reversal, you know what to do.
On the daily chart
- Direction: up, up and up > higher highs+higher lows, above 200 moving average
- ADX: 53 and stable
- Ichimoku: up > cloud is blue and rising, tenkan line above kijun line, chinkou line above price, price is far from kijun line (risk of a small correction)
- RSI: 71, overbought
Today's action
On October 16th the SP500 touched a higher low and bounced on it to new record. It has now reached the top of the ascending channel from March 2012.
You are clearly looking for a buy opportunity here, but current levels are approaching strong resistance and I'd rather not place a trade here.
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