Beware of bull traps…..until they are not!

I don’t think that the S&P 500 is in a strong bullish trend (on a daily basis) yet.

It remains a ‘market’ in which I am renting, rather than owning.

It still needs to break about 4,119 to make a ‘higher high’.

For now it’s within a range. In fact, it has been in an approximate 13% range since May 2022.

Whilst recent price action is constructive, it remains a question of whether it can make a higher high.

If it does, I’m not going to confuse momentum with bargain hunting.

After all, the S&P 500 still remains above its 200 week moving average and there are gaps to fill back to 3,300 and some more at lower levels.

Fundamentally, I am bemused that the S&P 500 is ‘only’ 20% below its all-time high amongst the headwinds that I perceive.

The chart below also contains some of my trend line doodling’s.

January 12, 2023

by Rob Zdravevski

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