{"id":18898,"date":"2021-09-02T07:30:30","date_gmt":"2021-09-02T11:30:30","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=18898"},"modified":"2021-09-02T07:30:30","modified_gmt":"2021-09-02T11:30:30","slug":"the-melt-up-has-already-happened","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/the-melt-up-has-already-happened\/","title":{"rendered":"The Melt-Up Has Already Happened"},"content":{"rendered":"

Carve another notch in the “monthly winners” column.<\/p>\n

The S&P 500 closed higher for August, making it the seventh month in a row of gains. That’s the longest monthly winning streak in over 30 years.<\/p>\n

But, can the index make it eight in a row by rallying even more in September?<\/p>\n

I’m going to say “no.”<\/p>\n

Look at this long-term monthly chart of the S&P 500 (SPX)…<\/p>\n

\"Chart\"<\/div>\n

The stock market has rallied almost straight up over the past year.<\/p>\n

So, if you\u2019re piling into the stock market right here in anticipation of a \u201cmelt-up\u201d phase – you\u2019re too late. The melt-up has already happened, and the chart reflects it.<\/p>\n

This action has created a “parabolic” move on the chart. Parabolic moves are unsustainable. And, when they burn out, the ensuing decline often wipes out nearly the entire rally.<\/p>\n

So, let’s just throw this chart on top of the pile of things that concerns me about the stock market.<\/p>\n

The question for today, though, is “can the S&P 500 continue its winning streak for another month?”<\/p>\n

The problem is that the index is already overbought and overextended. It’s trading historically far above its 9-month and 20-month exponential moving averages<\/a> (EMA). And, the MACD<\/a> momentum indicator is as far into overbought territory as it’s ever been.<\/p>\n\n\n\n
\n

Free Trading Resources<\/strong><\/p>\n

Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

In other words, the stock market is more overbought today than it was at the top of the “dot-com” bubble in 2000, and at the start of the Great Financial Crisis in late 2007.<\/p>\n

Given the overbought and overextended conditions on this monthly chart of the S&P 500 – and given all of the other concerns we’ve written about the stock market over the past few weeks – it sure seems unlikely to me the S&P 500 can blast even higher for another month.<\/p>\n

Yes, it’s possible, and anything can happen…<\/p>\n

But, the current setup looks dangerous. I expect the S&P 500 will end September lower than where it started.<\/p>\n

Best regards and good trading,<\/p>\n

\"signature\"<\/p>\n

Jeff Clark<\/p>\n

P.S. <\/strong>While the current market looks dangerous, one thing my colleague and legendary hedge fund trader Larry Benedict knows is guaranteed to happen is something he calls the “7-day blitz<\/a>.”<\/p>\n

During this strange week-long phenomenon, over $1.2 trillion will exchange hands in the market. And if you follow Larry’s technique, you could see the chance to profit from it…<\/p>\n

Not a lot of people know about this window, but it’s one of the most profitable times of the year for traders. On Wednesday, September 8 at 8 p.m. ET, Larry will share all the details… just click here to reserve your free spot<\/a>, it won’t be available for long.<\/p>\n

<\/p>\n

Reader Mailbag<\/h2>\n

Are you a firm believer that the market will continue to keep going higher, or that it has to drop off soon?<\/p>\n

Let us know your thoughts – and any questions you have – at feedback@jeffclarktrader.com<\/a>.<\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Add this to the pile of things that has me concerned…<\/p>\n","protected":false},"author":49,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[7],"newsletter-type":[],"ticker":[],"class_list":["post-18898","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/18898","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/49"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=18898"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/18898\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=18898"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=18898"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=18898"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=18898"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=18898"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=18898"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=18898"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}