unusual? yes - unprecedented? no

The 2013 stock market rally seems to go on and on with nary a correction to speak of. This is very unusual behavior but as the charts above show it it certainly not unprecedented.

The top chart records the most extreme example of an uncorrected rally which I could remember since it made such an impression on me at the time. This daily bar chart shows the rally in the S&P 500 during the year 1995, the kick-off year for the internet bull market of 1995-2000. You can see that the S&P rallied all year without once dipping visibly below its 50 day moving average (green line in the chart).

The bottom chart is a daily chart of the S&P over the past 10 years with the 50 day moving average showing as a green wavy line (clicking on the chart should bring up a larger and more visible version). This chart encompasses the last two bull markets.

You can see that during the past 10 years the longest stretch between successive drops below the 50 day moving average during on ongoing bull market has been just about 6 months. The current rally from the December 2012 low is pushing against that limit. The odds are that sometime during the next month or so the S&P will dip below its 50 day moving average which currently stands at 1588 and is rising steeply.

Normally in a bull market the 50 day moving average acts as support and the market rarely spends much time below that moving average until the market market is over. In this instance there is also very strong support at 1587, the 2007 bull market top. So based on these considerations I'd say that a drop back to the 50 day moving average should begin soon but any such drop would be just a normal interruption in the bull market.

How much higher might the S&P go?  Right now the obvious target for me is 1775. At that level the move up from the October 2011 low would equal the size of the first leg up in this bull market from the March 2009 low to the May 2011 high.

Guesstimates on May 22, 2013

June S&P E-mini Futures: Today’s range estimate is 1664-1677. I think the 1574-1587 zone defined by the 2000 and 2007 bull market tops is now support. The next upside target is 1775.  

QQQ:  Next upside target is 76.50.    

TNX (ten year note yield): Bond yields are going much higher as the market begins to anticipate stronger economic growth. The first upside yield target for the 10 year is 2.50%.

Euro-US Dollar: The euro is trading below it 20 day moving average and has spent a couple of days below 1.2920 support. At this juncture I have to conclude that the market is headed below its April 4 low at 1.2744 but I will change my mind if the Euro can recover the 1.2920 level. In the mean time downside target is 1.24oo

Dollar-Yen: I think this bull market has much further to go.  Support is at 96. The current leg up should carry the market to 108 or so.

July Crude:  As long as crude does not spend much time above 100 I will stick with my view that it is headed below 70.

June Gold:  I think gold is on its way to the next downside target at 1200-50. In any case there is strong resistance above the market in the 1520-30 breakout zone.  

July Silver: Initial downside target is 20.00 while resistance above the market is at 27.00.  

Google: GOOG has reached and exceeded the 900 target. Support is at 800 and I think the next step up will carry GOOG to 975.

Apple:  Next downside target is 350. Resistance is at 460.

Guesstimates on May 21, 2013

June S&P E-mini Futures: Today’s range estimate is 1663-1673. I think the 1574-1587 zone defined by the 2000 and 2007 bull market tops is now support. The next upside target is 1775.  

QQQ:  Next upside target is 76.50.    

TNX (ten year note yield): Bond yields are going much higher as the market begins to anticipate stronger economic growth. The first upside yield target for the 10 year is 2.50%.

Euro-US Dollar: The euro is trading below it 20 day moving average and has spent a couple of days below 1.2920 support. At this juncture I have to conclude that the market is headed below its April 4 low at 1.2744 but I will change my mind if the Euro can recover the 1.29.20 level. In the mean time downside target is 1.24oo

Dollar-Yen: I think this bull market has much further to go.  Support is at 96. The current leg up should carry the market to 108 or so.

July Crude:  As long as crude does not spend much time above 100 I will stick with my view that it is headed below 70.

June Gold:  I think gold is on its way to the next downside target at 1200-50. In any case there is strong resistance above the market in the 1520-30 breakout zone.  

July Silver: Initial downside target is 20.00 while resistance above the market is at 27.00.  

Google: GOOG has reached and exceeded the 900 target. Support is at 800 and I think the next step up will carry GOOG to 975.

Apple:  Next downside target is 350. Resistance is at 460.

Guesstimates on May 20, 2013

June S&P E-mini Futures: Today’s range estimate is 1657-1668. I think the 1574-1587 zone defined by the 2000 and 2007 bull market tops is now support. The next upside target is 1775.  

QQQ:  Has reached the long standing 73 target. Next upside target is 76.50.    

TNX (ten year note yield): Bond yields are going much higher as the market begins to anticipate stronger economic growth. The first upside yield target for the 10 year is 2.50%.

Euro-US Dollar: The euro is trading below it 20 day moving average and has spent a couple of days below 1.2920 support. At this juncture I have to conclude that the market is headed below its April 4 low at 1.2744. Downside target is now 1.24oo

Dollar-Yen: I think this bull market has much further to go.  Support is at 96. The current leg up should carry the market to 108 or so.

July Crude:  As long as crude does not spend much time above 100 I will stick with my view that it is headed below 70.

June Gold:  I think gold is on its way to the next downside target at 1200-50. In any case there is strong resistance above the market in the 1520-30 breakout zone.  

July Silver: Initial downside target is 20.00 while resistance above the market is at 27.00.  

Google: GOOG has reached and exceeded the 900 target. Support is at 800 and I think the next step up will carry GOOG to 975.

Apple:  Next downside target is 350. Resistance is at 460.