Low Volatility Advance
The Bull Market Express marches on – albeit at a snail’s pace. Friday saw the S&P 500 – aided by the on-fire NASDAQ – push slightly above its February 25th high and, in the process, eke out a marginal new all-time high – but it could not hold it into the close. Last week saw only the New York Composite and the S&P etch-out new all time highs. Laggards included the Dow Industrials, the Dow Transports, and the Russell 2000. The NASDAQ is a mere 31 points from eclipsing its March 10, 2000 high. I suspect new all time highs in the NAZ will be secured early this week.
The low volatility characterizing this latest push to new highs would seem typical for what one would expect leading to a significant high. Volatility typically peaks at significant lows and dries up at high-point reversals. I would expect very low volatility at the May high, and we are seeing the pattern develop to that extent.
In the short term, I have identified a major price octave at 2,125 for the S&P 500 – we are just about there. My hourly work portends a short term respite beginning about Tuesday morning. I suspect we’ll see the S&P tag the 2,125 level and then stall. That may well coincide with new highs in the NAZ as well. Then I would look for a few days consolidation lasting for the balance of next week, then a regrouping and final push up into May 13th (+/-) for what could be a major stock market peak.
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