S&P Rally Ending With Exact Same Topping Pattern As Feb-April 2010 Rally Which Ended In Collapse

As we've been noting over the past several weeks (Click here for last week's warning posted on ZeroHedge) this rally bears a striking resemblance to the Feb-April 2010 rally and as we've been predicting we believed it would top out and end in the exact same fashion.

Note in April 2010 just before collapse we saw the S&P begin breaking below the 10-day EMA on an intraday basis for the first time in weeks (first sign of weakening uptrend), we then saw another push higher followed by a test of the 20-day EMA, and finally another push to new highs followed by a complete breakdown off those highs (note in April of 2010 focus was on DOW 11,000/S&P 1200 here it is DOW 12,000/S&P 1300).

The exact same pattern has formed here in January 2011, and we believe there is no reason we can not see the same type of collapse in equities as the internals of this rally are precisely the same: widespread overowned sectors with prices over the past several weeks being solely driven by a single Fed buy program (no real demand simply a single artificial bid) and extremely high levels of complacency with little to no buying of protection as longs had become convinced that stock prices could not decline as long as Fed continued backstopping equities.

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