As of Friday, April 7, 2017 at the close of trading EquitySurge™ has continued a strong sell signal for USA equities.
The bears have had placed before them a feast of bad news, including Fed rate hikes, North Korean missile launches, a poison gas attack in Syria and the first substantive US response to such an attack in the form of a cruise missile bombardment of the air base that allegedly launched the gas attack, and most recently a very sub-par Employment Situation Report, and yet they have not been able to take the stock market down for more than a smidge before the buyers come galloping in.
However, recalling those famous Paul Masson Wine commercials from the 1970’s where Orson Welles promised: “We will sell no wine before its time.”, so it seems the stock market is not going to drop before its time.
We are watching what looks to be a massive and substantive double-top forming in the S&P500 Index. Looking at the Index Futures, the left side was formed on March 1, 2017 when the futures hit the 2400 level; the bottom was established on March 27, 2017; and the right side top should occur somewhere between 2400 and 2430 on the futures around mid to late April.
As we’ve pointed out many times before there is an extremely important Fibonacci Extension target calculated from the Summer high to the election night low on the futures, which is the 261.8% extension at the 2430 level. The stock market is likely to closely approach or hit this target to complete the double-top formation. We are expecting this price level to come with large negative divergences on numerous technical indicators, which will confirm the double-top.
See the chart below for details:
If you still have long equity positions, you are entering the final opportunity to sell high and get to cash to escape the coming drop, which could be enormous in scope.
If you would like to review the EquitySurge™ trading signals generated in 2016 and so far in 2017 please see the Trading Signal Performance Chart page.