Has the Trap Been Sprung?

• Posted by Robert Sinn
• on June 21st, 2012

On Sunday in my Weekly Letter I mentioned the distinct possibility that equities were in the process of setting a bull trap similar to the early July 2011 rally:

“Simply put the rally may have a little bit more fuel in its tank before it runs out of gas but I would advise being cognizant of the risk of a bull trap similar to the one we witnessed in early July 2011.”

I am not the biggest fan of market analogs, however, the similarity between the rally that ended on July 7th, 2011 and the rally that may have ended on June 19th, 2012 is too powerful to ignore:

Click to enlarge (notes on charts)

$SPY 2011

 

$SPY 2012

As Mark Twain once said “History does not repeat itself, but it does rhyme.”

 

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