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The Top Is In!

By TheMoneyMaven ⋅ Email This Post Email This Post ⋅ Post a comment

For the past 3 days we have seen a lot of resistance around 1000/1007 level on the S&P. Is this the top before we pull back? I believe so. The talking heads believe that if there is a pullback then it will be shallow. Many believe 950 on the S&P or at most 870. I do not believe this is the case. I believe a downturn can really go a lot further and faster than previous pullbacks.

I reasoned this by looking at the psychology of the market right now. Everyone’s consensus is: no one believes this rally but are holding their nose and buying because we may have some type of recovery. Also, we have not had a 10% pullback since the March bottom so there is no real support under this market except the 870 level on the S&P. So this means, here at S&P 1000 if we get some substantial selling or a bad economic report, everyone with any type of profits will run for the exits. Many investors are still in pain from the Aug 07, Oct 08, and Mar 09 sell offs. So any familiar signs and investors will be determine not to get caught again.

Posted on August 5, 2009
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