Markets Hit Key Target: Rocky Road Ahead
Just as all the suckers pile back into the stock market, a major target is hit. Two weeks ago I alerted the world the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) would hit $150.00. In addition, the S&P 500 would tag the 1500 level. Once this target was hit, the market would start to get rocky and pull back. Sure enough, that level was hit perfectly today. It amazes investors that the markets still pushed higher to that master level regardless of the horrid earnings from Apple Inc. (NASDAQ:AAPL). However, knowing these master levels, you know it will happen, just like the sun will rise in the east and set in the west. This is how master levels work.
As I look to short the markets across the board here, a very sad fact remains constant in every market top. The individual investor just piled in over the last two weeks, thinking it was clear sailing ahead. This always happens at market tops and was no different this time. Recently, mutual funds saw the biggest inflow of capital in 12 years.
When emotion is removed from the equation and the charts are used to analyze a stock, the truth emerges. This could be seen when Apple was at $700 per share and analysts were upgrading it to $1,000 price targets. It was pure emotion and totally illogical. Now look at Apple. It trades barely holding onto the $450.00 level. I gave the sell signal as soon as those analysts were upgrading it. Analysts are supposed to be good at what they do? Frankly, they are no better than the milk man.
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