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The S&P 500 is now up 6 weeks in a row and is very overbought in
the near term. Meanwhile the VIX has been hovering near the 12 level and
briefly dropped below it on Friday. So one would think a minor pullback
can't be too far away. Previous drops below the 12 level (points A)
accompanied by a new high in the S&P 500 has been followed by a correction
(points B to C) in the past few years.
Meanwhile, if a pullback were to occur, support now looks to be
near the 3000 area (point D) which is along the lower portion of the narrowing
upward channel.
Finally, the rally from the 2009 low has been rather amazing
and is the longest Bull Market on record. In fact, since 1990, we have
witnessed the two longest Bull Markets on record, going back to the 1880's.
In between these two, there was a sideways correction which lasted "9"
years. Thus the question is, once the current Bull Market ends, what
type of long term correction will follow?
Amateur Investors
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