On January 24 I wrote an article called Pivots Are My Crystal Ball. In that article I gave some predictions on where the yearly pivot points showed the S&P 500 would go to this year.
Market Recap
I said the S&P 500 will go to the yearly R1 pivot point at 1990. Currently, the SPX is just a few points away from that yearly R1 pivot point. In 2013, the rally stalled and pulled back at every yearly pivot point ranging from 25-100 points.
What This Means
I’m not calling a market top or the high for the year. But, we should see a short term pullback soon at 1990-2000 based on past history. The Nasdaq 100 (NDX) is also very close to its yearly R1 pivot point. Volatility rises during the July-October period.
Bottom Line
Use the rally this week to take some profits off the table or buy some cheap protection. Keep some powder dry!
