After a nice Federal Reserve boosted run, it seems this stock market has run out of steam. I wonder if it is just a coincidence that the scaling back of QE3 coincides with the market peetering out? Mid-caps stockshave broken below support levels. In 2007 they meandered around after breaking support before performing a cliff dive, losing 50% in a matter of a few months. I wonder what will happen this time.
Today’s chart presents the long-term trend of the S&P 400 (mid-cap stocks). As today’s chart illustrates, the S&P 400 has been in a strong uptrend ever since the financial crisis induced bear market ended in early 2009. In fact, the S&P 400 has gained over 240% since its financial crisis lows. During the current calendar year, however, the pace of the S&P 400 rally has slowed and has had difficulty getting far above support (upward sloping green trendline). Since the beginning of July 2014, the S&P 400 has trended lower and has just broken below support of its five year uptrend.
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