SPX (S & P 500) Took Out The July Cycle High

Due to today's good economic data and massive Fed credit in recent weeks due to the mortgage/credit crisis, see http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE, the Fed added $28 Billion yesterday/10-4-07, SPX (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) took out the July Cycle high (barely, cycle high so far today at 1556.33 versus 1555.90 July cycle high) that was a likely Cyclical Bull Market cycle high, for the cycle that began in October 2002.

SPX's (S & P 500) 5% major sell signal, see chart 2 at http://www.joefrocks.com/GoldStockCharts.html, indicated that July's cycle high at 1555.90 was a likely Cyclical Bull Market cycle high. However, the purpose of a sell signal is to sell at the right time, so, if only a slightly higher double top cycle high or even a modestly higher cycle high occurs a few months later (October versus July), then the sell signal was a good one. Also, a 5% major sell signal indicates that risk is far too high to trade aggressively long. Whether it nails the major cycle high or not isn't that important.

A slightly higher double top cycle high or even a modestly higher cycle high wouldn't be too surprising, given the massive Fed credit in recent weeks and market timing obviously isn't an exact science (but is definitely a science), but, it'll be surprising if SPX's (S & P 500, http://stockcharts.com/charts/gallery.html?%24spx) Cyclical Bull Market surprises substantially to the upside.

....... http://www.JoeFRocks.com/