Has the S&P Index Topped Out for the Year?

Posted on by The INO.com Team

There is compelling evidence that we may have seen a top in the S&P index. In my new short video, I show you the evidence that I have found which may point to the fact that we are going to see a correction in this index.

While the S&P index needs to put in more work to create a major top, there are early signs that this may be happening. I think when you watch this video you will come to the same conclusion as I did in regards to this market.

As always our videos are free to view and require no registration. I would really like to hear back from you with your thoughts on this market. Please feel free to leave your comments on the blog.

All the best,

Adam Hewison
President, INO.com
Co-creator, MarketClub

21 thoughts on “Has the S&P Index Topped Out for the Year?”

  4. Great video. If you look at the monthly chart you will see we are finishing out the month with what appears to be a spinning top or doji candle which can give clues to a top or bottom. We are also right near the 50% retracement. Indicators are also turning bearish. Here is a link to my chart that I did. http://screencast.com/t/RxDworU1h Thanks again for taking the time to do these videos.

    Pipsniper

  5. does anybody else think the gdp numbers out today are contrived? How can you have gdp growth with 10% unemployment? Is the huge amount of government spending and "stimulus" money artificially inflating GDP?

  6. Hi Adam,

    In my comments above about the SPX (S&P 500) going down to the 280 or so level, I know it seems draconian...and it is. But the SPX has been there before in our trading lifetimes, so it's not impossible given that the market has been run up since the first leg down, with Govt. bail outs and an "easy" money Fed policy and mostly a debt bomb that is growing exponentially when you consider all forms of Govt. debt (read entitlements, for damn near every one for everything). Why people think we can re-inflate this economy and party like it's 2007 is just incredulous. Short term maybe. But I and others think we will have a washout of the market that will not be so easy to fix. When it happens, and all the regular folks see their stocks, mutual funds etc. at new drastic lows, even if we revisit the recent march '09 low, they will be more likely to puke than to buy more stocks at the bottom. They won't want to even hear the term stock market as it will bring on waves of nausea. We will have a Japan like market that crashed and has stayed down for 10+ years...at the lows. Once agiain, I sure hope I am proved wrong, wrong, wrong. That would be the best kind of being wrong, and I would be glad of it. Good luck all!

  7. Looks Japanese yen carry trade unwinding would bring pressure on indices. S&P just flirting at critical level 1050, let see where it close today

    1. Shulamit,

      Thank you for your feedback.

      I've never been a big fan of trading silver so I would not be the person to go to on that particular market. I prefer to trade gold as it has been a greater store of value throughout the ages.

      All the best,
      Adam

  10. Thanks for your analysis. I am mostly in cash and think the SPY will break and go "substantially" lower (I can't guess how much).
    However, I am starting to buy PUTS on the major indexes and some individual stocks. Hope I am right so can recover previous losses!!!

    Best regards,

    Victor

  11. Adam, I really appreciate your analysis of the S&P 500--can you suggest an ETF for the S&P 500 to use for buying Puts? Thanks again!

    1. Daphne,

      Thanks for your feedback.

      Not sure about an ETF for puts on the SP500. You could buy the ETF Proshare short SP500 symbol SH. If the market goes down that should work for you.

      Good luck,
      Adam

  12. Adam,

    Thanks for the great videos. To summarize a bit from your videos from the past several weeks, we seem to have broken out of a large consolidation in gold from the past 18 months... the dollar has resumed its secular downtrend... and the S&P may be topping here or shortly. I am curious to know if you have observed the same strong correlation between the S&P 500 and gold, both moving inversely to the dollar. If, in fact, the S&P tops sometime soon, do you believe that the gold market could finally break away from the correlation with the broad stock market? This would imply that the S&P 500 may fall at the same time as the dollar continues to fall... however, the S&P/US dollar still seem to be highly negatively correlated at this time. I am curious to hear if you believe these three highly highly correlated markets may finally start trading on their own merits and not just off of correlations with each other.

    Thanks,
    Chris

    1. Chris,

      Thanks for your feedback.

      Correlations come and go. The best measure is to go with the market.

      All the best,
      Adam

    2. The general view seems to be that Gold will begin going down with the markets, but will then disconnect from the stock markets downward movement and rise up as the markets continue to fall. At what point this happens is anybody's guess. The short term may be lower Gold, but possibly the medium and definately the long term trends are up. Guess you just have to do a Warren Buffet and take a position on this, then grit your teeth if it falls some. The other view is buy on the dips. Gold doubling or trippling or more over the next 2-3 years+ Well its a long time frame, but then if you are doubling or trippling your money then maybe that doesn't matter? Perhaps one case where buy and hold is definately valid....at least for a few years. I am long Gold and Silver, which lags Gold at this time. Perhaps you could wait for the market to tank pull Gold down and then jump in when you see Gold starting to rise against the markets. Tricky though!

  13. If you look at the monthly charts, there is a HUGE stochastic 14,3,3 reverse (hidden) divergence which has formed on the SPX and the DJIA. This means that there is a lot of power which has already built for a move down of some consequence, soon to be triggered. If you do a symetry measurement from the top of 10-31-07 (monthly chart) to the bottom at the low in March of '09 and take that distance to the right of this upswing since the March low, subtract it from the current high, the projected low for the SPX is eventually around the 280 level.

    The number of months to get there from here is 21 months, derived from the back count of months from the March '09 low to the '07 high.

    Is this possible? I HOPE NOT! But if it is, we may get to the bottom a lot sooner, as price can exceed time when there is enough "news". In this case there may be plenty enough bad news to wash these markets out. A lot of people think we are at the brink of the next wave down in a "perfect storm". Media giddishness and talking heads blather about a recovery aside (remember, they didn't see the last big slide, "CHANGE" comming either), so they have no clue about the possibility of this occurring. Time will tell, but now that there has been a move up over the last 8 months, there's a lot of folks who will "take profits", scare the crap out of the rest of the small IRA and 401K holders, foreign account holders etc. and cause them to bail en mass after they get slapped real hard agian during the latter pahses of the next wave(s) down. Gosh, I hope I'm wrong!

  15. I think you are right on with the chart.I would hate to see it break the 1000 but I think it will.Watching the action in aapl some of the banks tends to prove your theory.Good job

    ron smiley

  16. Adam,

    I'm inclined to agree with your assessment. I believe the index will rise to about the upper trend line, and then go down and break through the lower one. Not sure of the timeframe, but I'm looking for another month or so before this happens.

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