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Real Time Insight

You know the story. The S&P 500 hasn't had a real 10%+ correction in nearly 3 years (spring-summer 2012 was 9.8% depending on how you measure).

And it hasn't touched it's 200-day moving average since late 2012. A streak of 21+ months is not the record, but it's pushing into the top 5 I believe.

So here we are with a market that has run 40% since 2012 and we have entered the weakest time of year seasonally. We've got a bounce off of a cluster of support near 1900, but it's pretty weak so far.

Did I mention the other big "seasonal" effect that only comes around every few years? Yep, mid-term elections in the 2nd term of the President. It is historically a big downer for the markets.

I don't have any bad economic or earnings news (that's two big plusses for this market!). But in addition to the known end of QE, European equity markets are breaking down fast with the German Dax falling hard through its 200-day this month.

Here's the S&P chart as of Monday's close, which sat just above the midpoint of the 200-day at 1865 and the all-time highs at 1990...



My question today is "What comes first?"

a) Touch the 200-day

b) New highs 

If you are more bearish and expect a 10%+ correction to 1800 this autumn, please opine further.



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