Are We About To Repeat 2010?

The market has been on a non-stop grind up with the dips being bought on every drop. This is nothing new. We have seen this type of grind-up scenario play out many times in just the past 4 years. Most of the 2009 rally was a grind up. Early 2010 was a grind up and so was the second half of 2010 to February 2011.

So if were in a bull-grind up market, everybody wants to know: “When will we pullback and how much”? Looking over the $SPY chart from the summer of 2010 to February of 2011, I see many similarities when compared to the summer of 2011 to the present.

One major similarity was that both summers (2010 and 2011), the markets were met with chop, volatility, and range. However, I am starting to pick up another similarity (among  others). The grind up market is back, bullishness ishigh, shorts are getting squeezed and most stocks are above major moving averages.

Looking at the chart, I think a pullback after in the next 3-4 weeks is possible. After a nice orderly time consolidation last week, I can see us easily moving up for another 2-3 weeks. However, I would expect a pullback right before we got to the 2011 high. That would set us up nicely for a break to new 3.5 year highs.

The Charts

Take a look at the chart from 2010-2011 and 2011-2012. See any similarities?

$SPY Daily 2011-2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

$SPY Daily 2010

After the “pullback”, we saw the $SPY rally for another ~15%. Will that happen again this time?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tags: $SPY, $SPX, $DJIA, $DIA

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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