So now its a question of spotting the fundamental excuse for the next correction. It probably won't be Europe this time around since the ECB has shown its hand regarding support for economic growth. Same goes for Japan. The Australian rate cut the other day didn't place a dent in the carry trade.
I'm thinking something vaguer along the lines "new" asset bubbles leading to fear of Fed tightening.
it will happen when brokerage firms decide that revenues are too stagnant and they need to increase-thus they create their own volatility ,by putting out a sell signal--i am guessing its close becuase they last few trading days were yawners.
" “We expect the topping formation, either a head-and-shoulders or double top, to develop over the coming weeks and months before the bulk of the decline materializes and accelerates,” the S&P committee members wrote in a research note late Tuesday.
But they point out that a correction won’t derail the bull market: S&P Capital IQ still pegs the S&P 500 at 1,670 in 12 months."
Despite another new high on $SPX, the $RUT chart is looking really pretty for the day. Price levels have thus far stayed within the boundaries of yesterday's candle. Small caps typically lead a downside reversal. I wouldn't be surprised to see a slightly red day or two in store for small caps while $SPX continues to eak out another gain or two.
Another point is that this is the last big ($2.75-3.5 billion) day of POMO injections through next Tuesday. There are no injections at all scheduled for Monday.
"So now its a question of spotting the fundamental excuse for the next correction."
No need, Aco. When the market decides to go down, it'll just do it. The excuses are an after-the-fact phenomenon. And btw, the excuses can be the same regardless of whether the market is up or down. "Market up on big jobs number." "Market down on big jobs number."
Point taken Aapl, but sometimes its possible to get ahead of the curve if you can spot a good enough excuse in advance.
Being aware of the last fear spike in Spain (regarding the presidential corruption investigations), Italy re-election problems, and surging bond rates in both countries while global markets continued to surge in March was a good tell.
As you have amply demonstrated, sentiment reads are helpful also. A solid chart read can also do the trick.
Let's hope our ocular grading was correctly measured :)