A short but MIGHTY month! The Nasdaq Composite (COMP) gained 7% for the month; the Dow 30 (INDU) was up 5.6% and the S&P 500 (SPX) closed up 5.5% over January.
The current bull market enters its 7th year! The long-term up trend in SPX, INDU and COMP began with the monthly lows made in March of 2009; at 667 in SPX, 6470 in INDU and 1266 in COMP.
All these major indices are at new all-time Closing highs. The Nasdaq Composite made a new all-time monthly Closing high in November at 4792 but is shy of one last spike up that occurred in March 2000, when COMP rallied to a peak price of 5132. Of interest to students of market cycles, March of this year then marks the 15-year anniversary of that high in COMP.
The February gains were substantial of course. A feature quite noticeable on the monthly charts is that the various relative highs of recent months come up TO, but not ABOVE the upper end of the broad uptrend price channel seen on the 3 monthly charts featured in this February 2015 month-end report.
If this pattern continues, that of gains that do not pierce the upper 'resistance' end of the monthly price channels, 'maximum' SPX, INDU and COMP Index gains for the month of March would be LESS THAN 1 percent over their February Closes. A radical projection it seems! One just based on a trendline!! I think it's possible however. If so, this would have major implications for trading strategies for the coming month.
THE S&P 500 (SPX) MONTHLY CHART:
Assuming the aforementioned pattern continues, its possible SPX wouldn't rise to ABOVE the 2136 area, fairly close to its February high of 2119 and its February Monthly Close of 2104 (+.015%).
If SPX Closed no higher than 2136, this would represent only a very minor monthly increase of .015% (15/100 of 1 percent).
It goes without saying that March could be a DOWN month, just as January was relative to December.
THE DOW 30 (INDU) MONTHLY CHART:
In the Dow 30 (INDU), assuming the same aforementioned pattern of tops forming at the high end of its broad monthly uptrend channel, INDU might only climb to a 'maximum' of 18500 in March.
Even if INDU Closed at the aforementioned 18500, this would not be very far above its February peak of 18244 and its February Close of 18133, suggesting a 'maximum' monthly Closing gain of just +.02% (2/10ths of 1 percent). Stay tuned on that!
Alternatively, March could be a down month, as was January relative to December.
THE NASDAQ COMPOSITE (COMP) MONTHLY CHART:
If the foregoing theoretic outlook is applied to COMP, where this Index was limited to a March top, or Close, at no more than 5050, even such a Close would only represent a 'maximum' +.017% (17/100 of 1 percent) gain above COMP's February Close at 4963.
Of course March could also be a down month, just as January was in relation to December.
GOOD TRADING SUCCESS!