S&P 500 Hits New 4 Year High With Parabolic Move But Ends Day Down (August 21, 2012):
Last week we were waiting for the stock market to make new multi-year highs and told our readers not to short the market because a parabolic move was coming. It came.
Here is what we posted on August 5, 2012 on an article entitled “S&P 500 Approaching New Multi-Year Highs Will August 2012 Mimic Last Year?”
Recently, our analysis of the 20 year bond TLT suggested the market would follow through on an upward rise while some analysts were stating they were shorting bonds and the S&P 500 at the same time which didn’t seem to be a good short term trade. We would wait until the S&P 500 got nearer to new highs before beginning to look at the short side but an upward parabolic move could occur that would make this trade a bad play.
Today, the stock market jumped to new highs and it was a good opportunity for shorts to enter the market. The TLT bond exchange traded fund has been resilient for the past couple of days which suggests the market may be taking a breather as traders look for new support levels. The S&P rose early today, but by the close, couldn’t sustain the gains which is a bearish sign. We are-neutral bearish on stocks near term.
Tuesday August 21, 2012
- DOW 13203.58 -68.06 -0.51%
- NASDAQ 3067.26 -8.95 -0.29%
- S&P 500 1413.17 -4.96 -0.35%