S&P 500 is nearing 2000 mark.
I have been extremely apprehensive about the market since long time. In my last post in April
7 2014 I was expecting that the maximum upside in S&P was up to 1950. Although
markets have certainly exceeded my expectations by a small margin my view
remains unchanged.
Almost all major US indexes are
trading at the upper end of the channel and upside form here seems extremely
limited.
DJIA
S&P400 MIDCAP
NASDAQ 100
S&P500
It looks that
we are very near to an intermediate term top in US markets. The upside form
here should be limited to 1 -3% while downside form here should be around 12%
and more.
Similarly
interest rates in US also looks like breaking out form the consolidation they
were in since January of this year. If yield breaks above 3.25 levels the next target will be 4%
The last chart is
of US Volatility index. US VIX has been trading at all time low and recently
gave a breakdown from triangle formation. I believe that this is whipsaw or a false
breakdown and VIX is more or less indicating an intermediate topping of the
market.
Summary
1.
Upside in US market is extremely limited from
here to the tune of 1% to 3%
2.
It is time to book profits and/or incorporate hedges
for your portfolio.
3.
Expect 10%
plus correction in US equity markets
