By this point we're all familiar with the long-term megaphone formation in the Dow. The S&P 500 however, is painting a slightly different picture - a more bullish one. As can be seen below, the 2008 peak was nearly the same as the 2000 peak, forming a double top. This resistance level was surpassed earlier this year and will now act as support on any pullback.
The other item to note from this chart is that from 2000 to the beginning of 2013, stock prices did not advance. Thirteen years passed without the markets making substantial ground. It seems inappropriate to call this a trading range, considering the major whipsaws, but in effect prices went nowhere. This places a bit of context around the permeating bubble talk.
RSI is in the overbought zone but this particular indicator must always be used in context. Any strong rally will take the RSI above its upper ... Log in or subscribe to continue reading.
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