The Hits Keep Coming

Last week the S&P 500 set yet another all-time high… before dropping… then recovering. What does it all mean? In short, it looks like the trend is unbroken, and the bulls are still in charge.

Despite all the chaos in the world – the very real inflation we’re all experiencing – and the very real catastrophe in Afghanistan – investors still appear to have no better place to put their money than the stock market. And the prices keep climbing.

Last week markets peaked on Monday before going on a back-slide. It took until Wednesday for the SPX to find footing. From there, the prices recovered. And by Friday, prices were back in the middle of the trading range.

Underneath all this action it looks like a minor price retracement wave was completed as the pull-back tested the mid-July price capitulation range. From there, prices began to climb.

Absent some other black swan style event that throws this market off its pattern, it appears, at least in the short-term, that yet another extension higher is in play – likely towards 4500 – and it could be as soon as this week.

This market is on a pathway that is hard to justify fundamentally. The technicals are suggesting a 4850-ish finish this year for the SPX. That’s another 9% from here (and into the ‘extreme’ upside target range set at the beginning of the year).

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