With today's technical break up through the 200-day moving average and the piercing of strong technical resistance, US indexes have 'officially' resumed their uptrend.
Assuming a decorous pause for breath here rather than a sudden break down, stocks should now begin an attempt to regain their highs, set on April 26th at:
- DOW 11,258
- S&P500 1220
- FTSE100 5834
My forecast in this month's post and Investment Outlook suggested such a scenario was likely but that, nonetheless, stocks should fail to make new highs.
I'm therefore now anticipating a move to between 1130 and 1150 on the benchmark S&P500. A close at 1152 or above would suggest a push even higher, to around 1170. It's not possible to estimate accurately how long this process will take - it may only take a few days to hit 1130 from here for instance, but 1170 could take a few months - however, when the moment comes I will be expecting to see sell signals fire off in my key indicators. Until they do, I'll be pressing short term trades to the upside.
As soon as I begin to see a confluence of sell signals, I will post an update here.
That will be the point I begin shorting stocks and commodities with maximum force. It's possible that sellers will appear suddenly and, with tremendous ferocity, smash the rally attempt. Anyone wishing to protect their investments should use a last gasp opportunity over the next few days and weeks to either exit the stock market completely and go to cash, or make sure they are fully hedged and protected.