Tags: stocks | triple | top | S&P 500

Have Stocks Hit a Terrible Triple Top?

By    |   Friday, 19 April 2013 08:51 AM

An ugly triple top is appearing on the charts for the Standard and Poor’s 500 Index.

It hit 1,552 in March 2000 before falling back, 1,576 in October 2007 before falling back and now the S&P 500 has stalled after reaching 1,597 last Thursday.

The index closed at 1,542 this Thursday.

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

"I think history repeats," Guy Adami, managing director of StockMonster.com, told CNBC. "Listen to the punditry now saying, 'no contagion' and 'buy the dips.' It's the same exact thing you heard in 2007."

The Federal Reserve’s massive easing program may have lifted the market higher, he said. “But I think the market rally has masked a lot of bad underlying data."

For example, retail sales dropped 0.4 percent in March, consumer prices fell 0.2 percent last month and the International Monetary Fund just lowered its estimate of U.S. economic growth for this year to 1.9 percent from 2.1 percent in January. In addition, Thursday’s weekly jobless claims were higher than expected, and the Philadelphia Fed Index and Leading Indicators missed their estimates.

Shelter Harbor Capital’s Brian Kelly, who is short the S&P 500, noted the contrast in environment between now and the last bull market.

"During the 2006-2007 period, the global economy was significantly stronger, and the U.S. housing boom was in full swing," he told CNBC. "Why would below-trend economic growth produce more jobs?"

To be sure, not everyone is convinced stocks have much further to fall.

“Whether it’s a pullback or a corrective phase, I think it’ll just be a pause, because I don’t think the fundamental underpinnings are deteriorating more.” Mark Luschini, chief investment strategist at Janney Montgomery Scott, told Bloomberg.

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

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An ugly triple top is appearing on the charts for the Standard and Poor’s 500 Index.
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2013-51-19
Friday, 19 April 2013 08:51 AM
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