John Kosar, CMT, of Asbury Research, noted an accurate call of January’s market top in Forbes last week while offering his commentary on the S&P 500’s future growth potential.
Of the top, Kosar wrote that January’s “sharp decline pushed the index right into underlying support at S&P 500 3212 to 3205 on January 31st. This level had to hold for SPX’s current tactical uptrend — which has been in effect since October 2019 — to remain intact,” as shown in the chart above.
Citing the forecast of Asbury’s Cross Asset Relative Performance (CARP) model, Kosar expressed caution. “[E]ven though the stock market appears to have just avoided a downside correction and has come roaring back, it remains historically overextended while our CARP Model indicates some investor apprehension. We see this as an environment to remain invested, but to keep a closer-than-normal eye on the market — and your holdings — with an exit plan in place just in case this investor apprehension turns into another, more meaningful corrective decline,” he said.
Read the whole article here: Stock Market Heads Off A Correction—For Now.