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The 1,300 level has been key for the 500 index a few times over the past 10+ years! Longer-term investors shouldn’t sell here, yet should consider protecting values right now. If you are a short-term investor and short, a break above 1,300 could become rather painful!
Thanks for this very timely post!
Fearing the worst at this level – I am protected and anxiously net short W/ SPY Puts.
Given your personal experience – exactly when would You ‘Call’ it a breakout?
(To go net Long?)
Exactly where would You call it?
A close of 2% or more above 1300?
How many days above 1300, on what volume or other metrics?
Exactly what signals would you need to see to cover shorts or to go long?
Thanks Again For The GREAT Posts!
Such a fascinating chart, Chris, and great analysis! To contribute to both sides of the argument:
— The moments your highlight were this level triggered stong falls where when the index already was in a strong downtrend. In the uptrend days, only minor corrections followed, as in 2006.
— On the other hand, your fat blue line shows that the current level has been resistance for 8 years during the 80s-90s strong bull market trading range. So we would be at the top of what should be a “healthy”, “normal” trading range…