BarroMetrics Views: S&P 2014-09-08
First off, thanks for the emails. Nice of you to ask. (Some readers had written to ask if all was OK in my world; they had noticed that my blogs had been shorter than normal). All is well – just working on something that is taking much of my time.
Turning to the S&P’s…..
It is at an interesting stage.
- Figure 1 shows the Fred AMB of the Fed Reserve. The deposits have started to fall; if they reach the orange line, a top will be signaled (retrospectively).
- Figure 3 shows the weekly chart. We see a two-week breakout on poor volume; and we see that last week, the S&P formed a neutral week. Normally this pattern, new high – neutral bar, augurs a break. But,
- Figure 2 (daily chart) shows that the S&P had been unable to sell off last week, Monday to Thursday; and, on Friday, on the below expectations Non-Farm, the S&P rallied. But, this relief rally (‘oh goodie’ QE to continue rally) was on the lightest volume I have seen for relief rallies. This may mean we are nearing a top.
Needless to say I am awaiting to see what happens. I’ll be using the model I introduced at the CMI event in August to tell me the top is probably in.
(BTW if you are wondering why my weekly is chart 3 rather than Figure 2….For some reason I was unable to upload the weekly as Figure 2…..joys of the internet).
FIGURE 1 FRED AMB
FIGURE 3 S&P Weekly
FIGURE 2 S&P Daily