I entitled this forecast “How Quickly We Forget” for a reason. It’s been amazing watching the talking heads on CNBC, and the poor “public” who thought the 20% rally was a return to the good times. So sad, so sad indeed. So sad that hope causes people’s memories to fade so quickly.

Does nobody remember December and January? You know, the December and January that saw the S&P rally from 741.02 to 943.85 or 22%? Check it out:

So the December rally was actually 2% greater from bottom to top than the current rally, and it took several weeks longer. What does this all mean? Well of course it means the past 3 weeks have been a bear market rally, and fell well short of changing the overall direction of the market.

The S&P 500 Forecast is Lower, Lower, Lower

I’m seeing a classic pullback signal on the 5 period RSI. This occurs when the 5 period RSI dips below 30, then quickly rises above 50, then turns back around. Today the RSI closed at 49.46! The money flow index isn’t showing strong buying pressure at all. In fact, it is below the leves of the december rally, which had a clear divergence that is not there now. The ADX is hovering right around 50. It is declining, but, a reading of 50 is still very strong, and there is a 12 point difference between the +DI and then -DI, which is a nice pullback contraction with plenty of bearish strength left.

So where is the market headed. First, we’re going to test the 61.8% retracement level around 739, then we’ll test the lows of 666.79. The final extension of this bear is going to head down to 500 – 575. My target for the S&P 500 is currently 575.

Popularity: unranked [?]

If You Like Our site: Automatically Receive Updates To RecordPriceBreakout.com Via Email. Thanks for visiting!