HR Matters!

Written by: Andre Marshall, Crunchrisk LLC

So far on the SP we have made it as high as 1532 on Feb 19th only to have retrace back to 1490 area before rebounding the last two days to 1515-1520 area. The market is becoming a bit more volatile. Poor fundamentals and money chasing returns will provide for a bullish market like we have seen. However, when uncertainty arise over news like Italian elections potentially putting into doubt the existence of the Euro then the markets get nervous. It almost doesn’t matter what the headline is, if the longs get nervous and sell on any such news then they are not that convicted. And herein lies the reality, the market is already in precarious territory after a 128% 4 year rally. It is not unusual to see volatility right before the change in direction trend of a market. We are likely headed to that 1546 target area we have been looking for, maybe a bit higher, but once there, we should expect a 10-15% drop in the SP, likely to June’s low near 1300. Timeline should be about a month out. From there we likely rally again, but to what level is still up for great debate.