Despite all the hoopla and fireworks, the S&P 500 Index (INDEXSP:.INX) has only seen a minor break to new highs. In fact, I wouldn’t even call it a breakout yet as I’d like to see the prior high exceeded by 1% for two consecutive days. The prior high was 2193.81 ( on August 15), so ideally we’d see consecutive closes above 2216.
Trust me, I haven’t turned bearish. My target zone for the S&P 500 still remains 2,300 to 2,500 by mid-2017.
But this “move” is getting a bit overdone and an S&P 500 pullback is nearing.
Now that the world has raised their equity targets for the end of 2016 and 2017, we could very well see a shallow pullback of a couple percent, potentially back to the 50-day moving average in the 2,150 area. I said last week I was not going to get too cute calling for a S&P 500 pullback, but the chest pounding and back-slapping by the bulls is getting to be a bit much once again. If you did not load up at 2,120, 2,100, and near the 200-day average prior to the election, this may be the last chance to board the bull train.
S&P 500 Index – Technical Chart
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