Market Timing

This bull market move is now facing its most daunting situation since 2009.  We are fast approaching a point of "Stone Wall" resistance.  This "Stone Wall", of course, is the all-time, intraday high for the SPY at $157.5/share on 10/11/07 (about $1565 on the S&P 500).   

What makes this so "daunting" is that $157.5/share on the SPY now would complete a very precise, almost perfect 13-year "Triple-Top".  See Graph #1 below (scary).  If the SPY fails to break through this level to the upside (after a couple or three times), the results could be devastating.
Graph #1



On the other hand, if the SPY does break through to the upside and stays above or goes higher, this could lead to panic buying (or according to Greenspan, "Irrational Exuberance"). 

For the last few months, the big guys have been selling on high volume and the little guys have been "buying the market" back up.  See the volume numbers in Graph #2 below.  Other than a couple of pretty weak "bear market traps" (which the MIPS models ignored) this market has been in a very obvious up-trend, and all of the MIPS models have been long since 11/21/12. 
Graph #2



The little guy, big guy behavior above is a little nerve-racking, but remember that the little guys can come in en masse at market tops, and push it a lot higher (a la the NASDAQ in the late 1991's).  See Graph #3 below.
Graph #3 (from Traders.com)


Good Trading !!!

From the outside, it would seem that this market should be going down. Most of the news from all over the world is bad news (or, at the very least, not good).  But, the stock market keeps going up.   With news like that below, how can this happen?

World News:
    

What others have to say (Jack's Wrap 3/08/13 - www.swingtradeonline.com)
"Once again, the market could find no sellers. The masses were thinking to sell the Jobs Report if it were good. Who can blame them since the market is so overbought. They were right. It sold. However, once it sold off some from the early morning highs, it was bought up once again. Not to the levels of the early day highs, but no real selling one would think likely after a strong early day pullback and still at overbought. The strength of this market is a bit strange, but you never fight the price action of the market. It speaks above all else.  And, the bears have nothing. For crying out loud they can't even get a simple pullback going of 3-5% to unwind grossly overbought oscillators across all time frames."

OK, but that still does not answer the question as to why this market keeps going up.  We think it is because the big guys have succeeded in sucking the little guys back into the market near its all-time highs and are hoping to have this turn into "hysterical buying" like in the tech bubble in 2000.  We don't really think that anything close to the market behavior in 2000 will happen, but the little guys could easily push the market higher from here.  If you look at daily price/volume graph over the last several months, you will see several days where the big guys really sold the market down (down on high volume) and then waited for (and watched) the little guys to push it ever higher (up on low volume).

At lease the big guys have succeeded in bringing the little guys back in the market after they missed gains from the bottom in 2009 of over 125% (see the top right in the graph below).  [BTW, see where the big guys buy (bottom left).]   In just the first two weeks of 2013, almost 20 billion dollars have moved from bonds and money market funds into US stocks and equity ETFs (Lipper).  And guess what, that came from the little guys.  See the graph below and you will realize that the little guys have been fooled again !!!  They are buying at or near what could be the top (where retail/small investors almost always flock back into the market).  The big guys will let the little guys push the market as high as the little guy wants, and then the big guys will dump en masse.

Let's rely on MIPS to keep us in the market on the ride up and get us out in time to make money in the downdraft (aka crash).

From www.traders.com