SPX - chasing here is a late trade
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By now even our kids know the SPX is above the 200 day moving average. We outlined our mid October bounce logic in various premium thematic emails (here and here). Our base case was a repeat of the June bounce. Lately we have been waiting for the overshoot phase. We overshot the 200 day moving in March by around 3%. A similar overshoot this time would bring us to approx the 4150/4200 level. The bounce in June was around 17% and lasted for 2 months. If we are to make a similar move this time around we would be reaching that magical 4200 area in 2 weeks. Bottom line is: chasing here is a very late trade. Sure we could be squeezing a few more percentages, but the big bounce has played out most of the potential. 4150/4200 is major resistance for this market, despite SPX trading above the 200 day...