The S&P500 still looks strong and the longer term investor doesn't have any real reason to worry too much. The only thing to watch is, just like the
FTSE100, there is divergence occurring in Momentum Indic. vs price action and the fact that we are towards the top of the trend channel. Despite these factors the SMAs are still all inline and positive looking, and all bullish trendlines are intact. So we should be too surprised if there is a pullback or consolidation soonish around the 1650/1620 area. If there is a breach below, we would need to have a reassess of the situation.
Going forward there may be continued noise associated with this index (and the rest of US Equities) going forward as peoples expectations continually adjust to what the FED's course of action will be in terms of tapering QE3. Our Fibb price targets remain valid of 138.20% and 161.80% retracement of the 2008-2009 drop, these being 1902.2 and 2111.94 respectively.
Charts sourced from IG Index
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