Intermediate Term Top

Here is a chart of the weekly S&P 500.

I measured all the bull uplegs and the intermediate term corrections. Generally, twenty-and-something percent uplegs are followed by shorter ones. Measuring from the June low, the latest bull leg has already been 16% long, so, since the market is up against the 1800 resistance, and already committed above it, I think a drop has to happen very soon. The following correction would be somewhere between 7 and 10 % long.

New Orders Index

"Anyone who has studied markets half-seriously learns not to associate vigorous economic activity with stock market bottoms, but with stock market tops."

     Will Rahal.


Here is an up to date chart of the New Orders Index.

In the vein of the opening quote, it is hard to be bullish over the intermediate term given this chart. I do not think we can talk of a bull market top yet but a larger correction is not out of the question soon. Meanwhile, the short term looks good, with 1800 as next stop.