Lets take a quick trip down memory lane! The sp 500 historical chart or spx monthly chart we can zoom back and take a look at the market on a more longer term view. It is not a waist of an exercise as you will see.
The spx monthly chart tells a very interesting story.
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| sp 500 historical chart - spx monthly chart |
You can see after the DOT COM crash we bottomed out in 2003 and this signaled the start of a nice bull run that lasted several years.
Next you will remember the start of the financial crisis in 2008 and the market crashed back down below the lows of the DOT COM crash.
Since 2009 the market bottomed and has not looked back since, we have been in a very healthy bull market since then.
Alot of analysts are looking at this spx monthly chart and warning of another market crash, because they are comparing the recent highs to the last two highs seen in the last decade or so, and are adamant that we are about to crash or see the same pattern we have seen in every time we get up to these heavy resistance levels.
Now that is a good analogy, but the market does not work like that. It is an eating, breathing, sleeping dragon and in all my years trading and watching the market I have learnt to always expect the unexpected.
Right now is far to early to start contemplating what COULD happen because we are still in a BULL market. There are no signs telling me this will stop tomorrow, next week or by next month. I am not saying a sell off is impossible, infact a nice sell off is overdue, I will be the first one to admit that, however we are in a bull market that started in 2009 and on a average they do not just stop one day and decide to turn around.
Right now is not the time to speculate and simply use support and resistance lines to pre-empt a crash or major sell off.
It is clear the market is still very healthy, and even if we see a large sell of this year in 2013, that will not change the overall picture that the market seems to very BULLISH right now. Its a two steps forward and one step back. Yes! Nothing goes up in a straight line! so even if we do see a nice correction occur in the months ahead, that will only add fuel to the fire that the bulls have been providing.
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