MaxQ On The Redemption Arc - Will The Market Reach Orbit Or Crash Out?

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Market On Open, Thursday 16 April

by Alex King, CEO, Cestrian Capital Research, Inc.

Equities right now are very simple to understand, widespread disbelief and gnashing of teeth across the investor community notwithstanding.

Let’s use $SPY as an example. Either it turns the previous all-time-high into support, and keeps moving up, or not. This isn’t as inane a point as it sounds. Here’s the chart.

If $698 becomes support, that’s very bullish for $SPY and I would expect to see it hit somewhere between $730-790 before a material correction.

But.

If it can’t hold at these levels and sells down back below the prior ATH then we may be in a simple A-B-C correction, like this:

Now this is already unlikely because SPY made a new all time high. It’s not often that B-waves peak above the start of the A-wave. Does happen, but again, the new ATH made yesterday makes it safer to own risk assets, not less safe. Yes it took me a while in my investing career to realize this too but once I got there, my blood pressure and pulse rate took a structural step down.

So we have to watch price as always, in each instrument as always, but that ATH yesterday was good news for the bulls.

Now let’s get into it.

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Alright. Let’s take a look at markets at the open.