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Recent High for the S&P 500 is Suspect

The markets have a history of hitting new highs at the end of a summer.
Michael Markowski writes for
Michael Markowski writes for

Two US indices, including the S&P 500 and the NASDAQ, closed at all-time new highs yesterday. However, the new all-time highs being an indicator that the 2009 secular bull is still alive and that the indices will continue on to newer all-time highs is suspect. It’s because of the following:

  • The Dow Jones 30 Industrials composite remains 500 points or 2% below its all-time high.
  • Yesterday’s volume for the S&P 500 was the lowest since the day before last Thanksgiving.
  • The highs could have been generated by short covering.Some investors including some short funds automatically cover shorts when an index reaches a new all-time high. Additionally, the short positions against the FAANG (Facebook FB, Apple AAPL, Amazon AMZN, Netflix NFLX and Google GOOGL) increased by more than 40% over the last year. Bearish investors are short an aggregate of $37 billion of the shares of the five members of the group. Two of the five, Apple and Amazon, closed at all-time new highs yesterday.

The markets have a history of hitting new highs at the end of a summer. The high for 1929 was September 1, 1929.

For those investors who want to get out of the market, which is currently trading at its all-time high and still have the potential for growth, I am recommending the deployment of a 90/10 Crash Protection Strategy. For information on the strategy, which is the only fail-safe strategy that one can utilize to protect liquid assets from crashes, recessions and depressions view video below entitled “Profit From the Crash”.

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