Bulls on the march as Indexes push higher but are they about to hit a wall

Index Analysis SP500

Time Frame : Daily

US Standard and Poors 500 Index

Overnight the broader market SP500 traded into new all time highs by just a few points but is it now the time to be prudent with tight risk management as global markets look extended and growth continues to slow. Major central banks around the globe have expressed concern of slowing global growth and have announced intentions for additional easing. Falling rates and falling (global) bond yields may not be a good sign for markets especially at high valuations as in the US, but stocks continue to be buoyed by rate cut expectations. History tells us that it is hard to predict what falling rates will mean but we are now in uncharted waters at such low levels of interest rates. Are we in a Euphoric stage of the markets as the US looks set to make new highs across the board? I feel that this is the time to make sure that risk is tight and only A+ setups with high probability are traded. If the market decides to turn, then it will be hard and fast and cause a lot of pain for bulls. Of course the trend is still up and we can only trade what we see and don’t fight the trend as markets can ‘stay irrational longer than we can stay solvent’. Also, the USD may not get the long term devaluation that is anticipated, to make their massive debt repayments easier, as other Central Banks devalue their own currencies which may make it hard for the US export market.

Index : SP500

Current Price : 2954.2

Status : On watch for a potential short squeeze then reversal