Thanks, RtS. 15Y S&P500 chart:
This is a simple chart, with a simple message: If the Bull Market is to resume, we need to get back above the 5Yma (= 60Mma).
The 5Yma has been important:
1. In 2001, it was support for a while. When that support line failed, repeated attempts to get back above that line also failed. Then, stocks went much, much lower.
2. For most of 2004, stocks tried and failed to get above the 5Yma. When they finally succeeded, stocks went much, much higher.
3. 2008 was like 2001. When the 5Yma failed, stocks went much, much lower.
4. 2010 was like 2004. The first attempt to get above the 5Yma failed, but succeeded months later, and the bull market resumed.
5. Now, that gold line has failed again. What's next?
6. If we don't get back above the 5Yma, we are facing the real potential for another immense plunge down, like in 2002 and 2008.
7. Here's the risk/reward balance: SPX 1500 max, 800 min (based on the double top and double bottom, very approximately). That's 323 upside potential from today, and 377 downside. About even.
8. If, 2 months from now, SPX hasn't gotten back above that 5Yma, I may go to 100% cash again (even if it means taking losses).
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