Tags: Redler | S&P 500 | market | high

Stock Market Is Dancing on the Head of a Pin

By John Morgan   |   Thursday, 28 Mar 2013 08:29 AM

Bulls are likely to take another run at the Standard & Poor’s 500 all-time closing high in coming days, but the real question is what will happen next, according to CNBC.

The S&P 500 has been approaching its all-time closing high of 1,564.38 in recent sessions, not that far from its all-time intraday high of 1,576, only to fall short.

"What's important is how we handle that area. Do we push through it and close on our highs and open the door to 1600, or do we kiss it and back off?" T3Live.com's Scott Redler, an often-quoted technical trader, told CNBC.

Editor's Note:
Billionaires Dump Stocks. Prepare for the Unthinkable.

"It feels like it's going to go through it. It's just whether it can hold and get some more momentum into the tape," he added.

But Jeff Kleintop, chief strategist at LPL Financial, is more pessimistic about a new high in the short term.

"We've had 13 of the last 16 weeks have been up for the stock market," he said. "We haven't had that since 1989. It's that overextended."

Kleintop is looking for a 5 to 10 percent pullback in the stock market in the near future, according to CNBC. He believes earnings disappointments could be a factor in where the S&P 500 goes from here.

"If we get that five to 10 percent pull back … I think we'll rebound back to the highs and maybe make a new high for the year in the second half.

Redler told CNBC that he's net long and still expects the market to go higher. "A close above 1,565 opens the door to that 1,576 level sooner rather than later," he said.

MarketWatch columnist Mark Hulbert, who tracks more than 160 financial newsletters, said he does not believe stocks are about to roll over yet because the popularity of market timing — an indicator he follows — has not yet peaked, as it has at previous market highs.

“My assessment is that though it’s on high alert, it is not currently indicating that a market top is hand. There are still too many advisers trying to predict when the market will peak out; the majority of them are not yet telling us that the sky is the limit,” Hulbert wrote.

Shah Gilani, contributing editor to both Money Morning and The Money Map Report, is cautious but still recommending long stock positions.

“We may not get a significant correction, in which case you want to be riding this bull market higher. Then again, the markets love to sucker in sidelined cash right before they crash. Is a crash possible? Yes it is,” he wrote in a column for Money Morning

“My trick is to follow the trend and follow that nagging feeling I get when the trend shows cracks that not everyone else sees,” Gilani said.

Editor's Note: Billionaires Dump Stocks. Prepare for the Unthinkable.

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