THE ROTTEN COMBINATION OF BIKINI CLAD BULLS AND GRUMPY OLD MEN
In an effort to keep readers apprised of the latest in a series of thoughts that would be impossible for me to categorize if it wasn't for this website, I would like to present a long-term look at the S&P 500. This will clarify exactly why I believe the resistance level we are facing (in the form of an important trajectory) is significant within the overall bull trend. Furthermore, we are banging heads with this resistance area as busloads of bikini clad bulls are taking great comfort in what seems to be the 2013 version of The Endless Summer.
Unfortunately, this is not 1966 and there are no surfboards or exotic locales in the stock market. There are only grey buildings occupied by grumpy old men that want nothing more than to see you walking around with rabbit ears, a tattered blanket and a cup that jingles. Your money becomes their money the moment you sink your teeth into the belief that what is being said by the majority cannot be wrong.
If we were rising against a wall of great worry as we were just two months ago when I was touting the benefits of bullish perfection I wouldn't be nearly as depressing a host. There is, however, reason to become defensive. Not bearish. Defensive.
My personal version of defense started this past week with the initiation of a medium sized hedge.
Here is a long-term look at the resistance level the S&P 500 is sitting on presently:
click chart to enlarge
S&P 500
