Present Angle of Support for the S&P 500 is Unsustainable
Watch This Market Closely
Note How Each Market Rally Since 1982 Has Been At Increasing Angles of Support
By George R. Harrison
The Chart you're looking at now is basically one-of-a-kind.
What most investors and traders aren't aware of is how much market trends depend on the energy contained within an angle of support and how important those angles are to determining how strong or weak a trend has become.
To better confirm just where the US S&P 500 Stock Index is in it's present trend, I've taken all the big trends since 1982 and shown their relative angles on this single chart.
What appears when we do this is a chronicle of rally-after-rally gaining strength and momentum over the one preceding and, therefore, having prices rise faster and faster.
This is, however, an unsustainable process eventually as we come up against the laws of Geometry and Physics as we approach a 90-degree vertical support line.
If you'll take a moment to view the support angles shown on the graphic above, you'll see the rising angles. The red-lined angle is our present S&P 500 Market move. It's extremely fast and steep.
Declines, when they inevitably come, also tend to be steeper and faster as well. Meaning that the fall from this high angle of support could be dizzying and faster than those preceding it in all likelihood.
The Bottom Line is this: The Stock Market Boom at present may continue further, but, will very likely reverse severely when it does break because of it's very steep angle of support. It takes a lot of buying power to sustain an angle of support this steep and, usually, the buying becomes exhausted suddenly. Present weakness in this market has been noted in my earlier post on April 19th, so, keep that as well as this new information in mind while closely watching price developments. - George
REMEMBER: This is just the balancing side of the yin-yang movement of markets and a natural occurrence. Nothing to fear here, just caution to exercise. Those who know that and have no fear of this normal process can also profit from it. Handsomely.
So, look at the markets in an opportunistic way and be ready for the trend shifts that naturally occur. Be ready to profit from both sides of trading; The Long side AND the Short side. - George
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