September (Intra Month Special) – S&P 500 Market Strategy Update
September 23, 2012
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Just wanted to give a quick update on the S&P 500. I couldn’t wait another week or so for my monthly update. It’s amazing to see what this market is doing in relation to our Model Price work.
Here is, as of Friday’s close, the model price chart of the S&P 500.
S&P 500 with weekly price bars, EBV Lines (colored lines).
Notice what is going on! The market is slowing squeezing up to the EBV+3 line, which is calculated at 1494. Amazing to see, but the real issue is interpreting what this means. Does this market breakout of EBV+3? As I said before, in previous blogs, I don’t think it does – just a guess on my part. Or is the market on the path of least resistance until something happens – news, good or bad – breakout or correction. Also notice these weekly price bars on how the low the volatility is. Or is this just a precursor to larger volatility at a later date?
It is always fun to speculate on the future, especially when it comes to making predictions about financial markets. I don’t know the future, unlike other financial experts, however the S&P 500 has limited upside potential (30 S&P points) and lots of downside. With world central banks in full “Quantitative Easing” mode, it’s hard to conjecture a correction being very deep however as always I would have your list of stocks ready to buy on any dips this market may give us.