4 Simple reasons the S&P 500 is NOT set up to crash

• Posted by Greg Harmon
• on May 12th, 2015

When I was growing up my parents told me the story of chicken little and the boy who cried wolf. Both parables are intended to teach the lesson that if you repeatedly make a big concern about something that is not really happening that when it does happen no one will listen to you anymore. You will have been proven wrong so many times that no one cares what you say anymore.

Its too bad that no one in the financial media was ever read and taught these lessons. Everyday we are told that the sky is falling in the market. And every day for 6 years it has not happened. So why is it going to happen now? I do not need to give any analysis on that end. You already hear it 24/7 7 days a week.

What I would rather do is remind you that the market is still in a long term uptrend. The chart above is even more interesting in that regard. It does not show the long term uptrend but rather only the last 12 months. And in it there are several signs that the trend is healthy and will continue.

First is the purple trend resistance. It is resistance yes, but it is rising. Next the SMA’s are all rising, and nearly in a parallel fashion. This is a good sign of a strong market. Third is the momentum indicators. The RSI is in the bullish range and the MACD has reset, remains positive and is near a cross up. Finally the price action since the February consolidation break out has been one of higher lows against flat resistance. This is known as an ascending triangle and is bullish, targeting a move to 2210 on a break higher.

This is not rocket science. Just look at the chart of price action. It is going up, not down or even sideways. Good luck out there.

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