Yep. Nailed it!
I called the top.... just kidding of course. However you don't have to search far on Twitter to find many who perfectly called this top. Yes the top is in right?.... we've read this story before....
Could we have seen the highs for now? There is a good chance we have. However I do think $SPY $300 is coming this year. Just like I thought in January, when the bears were banging their chests, that this market would hit new record highs. Which it just did.
Of course Small caps are still lagging. Which is something the bears are hanging their hats on. As if everyone's 401k and investments were in Small cap stocks.
Those with a steady investment plan may have bought the top in October... but they were also buying the low in December. So... even those buying the top yesterday.... they'll be buying lows and highs going forward.... which has worked out quite well since the dawn of man from a long term perspective.
With that being said clearly yesterdays late day rout is a concern for those with a very short term mindset. We could be looking at $SPY $290 or less over the short term. I think $SPY $300+ coming as well this year, but that will have to wait for now.
Yesterdays FED day took the rate cut talk down a few decibels. The market is still thinking one is coming, but just not as soon as they thought before yesterday.
The bottom line is... cheap money is still here to stay. And with stocks at record highs, yesterdays FED day gave the market the excuse it needed to sober things up a little.
For the short term, if we see more of these afternoon swoons, the market is telling us more downside lies ahead. Certainly this is something to keep an eye on.
For most of 2019 the action has been quite the opposite....
Morning Mourning --->>
However if the afternoon swoon returns with vigor, making yesterdays post FED reaction not a one day event, we could be setting up for a nice tradeable short term pull back. One that very well may bring out the same bearish talk we heard during the market swoon in late 2018.
I think a move back to the same moving average support we've touched two times previously during this rally, is a more likely scenario with $SPY ultimately kissing $286-$287 before it ascends again to record highs with a landing place north of $299.99.