Today's interesting chart is the S&P 500. Yesterday it made a new all time high, though it closed slightly below recent high closes. The chart has three support lines to help assess whether the uptrend is still holding during future pull backs. The orange diagonal is a support line which goes back exactly a year having begun on 27 February 2013. Price action has touched this line 5 times so it is a very strong support line. The blue diagonal has its origin in March 2009 at the end of the 2007/8 crash resulting from the financial crisis. This line has had three touches. The blue horizontal marks the S&P high of October 2007 which was the end of 2003 to 2007 bull market. It created resistance in April last year and support in June. The red line is the 200 day moving average which has remained comfortably below the price action since November 2012 indicating the strength of the current rally.
To make things crystal clear here is a longer time frame which shows the origins of all those lines. Significant new highs like yesterday's are usually followed by a pull back. The 15 January high was followed by a vicious 6.5% fall so we can expect trouble quite soon.
The UK market is also up at its highs. It has attacked and pierced the 6800 level four times now. It looks like a for times top so there may be trouble ahead here too. It's not guaranteed but we really need to be on our guard.
The Goldfinch by Donna Tartt
I have just finished reading The Goldfinch by Donna Tartt. Its 700 odd pages have provided me with immense pleasure and much food for thought.
Theodore
Decker’s saga begins when he is caught in an explosion at a New York art gallery
as a 13-year-old boy. There are many fatalities, including his mother and an
old man who is dying in the rubble of the room where Theo is trapped. The man advises
that Theo should rescue the eponymous painting of the Goldfinch by Fabritius when he
escapes the gallery. The man gives him the address of a house with a green doorbell which
The boy
loves his mother and is haunted by an imagined guilt that her death is his fault. They
were in the gallery on their way to a school interview following yet another of
his misdemeanours.
Theo’s father had abandoned his family, so with his mother’s
death, Theo has no-one to care for him.
Donna Tartt’s
vibrant story is told in Theo’s voice. The vivid colours and expert
brushstrokes she uses to paint his emotional development as he grows to manhood,
echo the quality of the painting which, recovered from the gallery, accompanies
Theo wherever he goes. Its beauty is never far from his mind. The depictions of
his companions on life’s journey are equally potent, so we are presented with an assembly of characters to enrich and enliven the story’s dramatic progress.
Equally
intense is Theo’s range of experiences. He learns the intricacies
of furniture restoration, he lives with drugs and alcohol, he mingles with the elite,
and he fends off gangsters. Donna Tartt's descriptions ensure that we know what it is to breathe the air in each of these settings.
As the story ended, I was
reminded of Oscar Wilde’s definition of fiction: “The good ended happily, and
the bad unhappily.” Donna Tartt is too clever to fall into that trap, for no-one
in her story is either good or bad. Life deals them sundry fates.
But at the
heart of Tartt’s story is the role of art: the unique connection made between the artist and the viewer. The artist calls out and each viewer receives his own message through time and through space. The message received is
never the same. Each viewer captures something to which his mind is uniquely
attuned. Theo’s connection with the little bird, chained to its perch and to an artist who died four centuries before in another explosion, is unlike any other.
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