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S&P 400 - The Technical Case
While we have recently seen various fundamentally driven predictions for the S&P going back to its 1994 level of ~400 (most recently from Albert Edwards and Russell Napier), few charts predict a comparable major retracement in the key equity index. And while it is not quite a variant of the Kondratieff Wave chart familiar to most, this chart courtesy of Sean Corrigan shows the historical 33 year peak to trough frequency of the S&P, emphasizing the cyclical periodicity observed in market cycles. The chart predicts the next 33 year low to occur some time in late 2015, taking the S&P to the proverbial 400 level. As Corrigan observes: "A third, post-94 Bubble-era decline of -50% would unwind all of that move and half the log rise of the Great Bull Market (something the '49-'68 move did) and return to both the mid-1960's highs and Fib retrace the whole post - WWII move. Doing this by late 2015 would preserve the 33 year span."
And some other just as illustrative (and cautionary) charts:
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actually you're supposed to say FOR THE FINAL CAPITULATION OF THE THE FIAT SYSTEM! Then add (in muffled tones) "if only you knew the power of the dark side....
nice chart. it shows spx 400 is a slam dunk if we break that trendline. but you will have made a ton more of money if you shorted the breach of the LINEAR trendline from the March 2009 low. which, if were to go there within the next serval months would only be about 1260. not terribly far away.
I still think Martin Armstrong has it correct (money shifts from public to private debt) - which is why Robotrader and his bullish stock calls will continue to infuriate the masses on this site for years to come.
the opinions on this thread including mine are great. nevertheless, the market will have the final say. fibs, waves are awesome and not even Soros will defy them. Soros is gold finger using his expertise in relativism. again, the market is the final verdict.
captain obvious is everywhere here today.
good trading to all
They planted that into your brain. Be careful on this site.
http://www.zerohedge.com/article/things-make-you-go-hmmm-such-mass-dumbi...
S&P 400? For your viewing pleasure:
http://www.youtube.com/watch?v=FIKZAoeMGag
~O~
Not going to happen.
If stock (theoretically) give claim to underlying assets (bricks & mortar), and The Fed will continue printing, how can this market go down as long as it is being priced in private Federal Reserve Notes? If hyperinflation ensues, stock ownership preserves 'value' relative to cash, which quickly becomes worth essentially nothing. If folks believe that The Fed will raise rates, then this is very possible, but otherwise, I cannot see this happening. It just does not jive with Benny and the Inkjets.
If a technical pattern is well-known, the pattern itself will change, so expect the low to not occur at around 2015
correct. and even if that weren't so, the "market" (ha) today is subject to the following, which all markets prior to were not: 1) POMO, 2) massive insider/regulatory collusion [it was always there, but the "insiders" were 1% whereas today's is shot thru with it], 3) quadrillions in derivatives, 4)rampant HFT [which did not even exist prior], 5) you name it. Point is, all "price discovery" up until ---- (2008, 2009, 2010?) was almost legitimate. Any realistic "price discovery" from now forward is impossible
If a technical pattern is well-known, the pattern itself will change, so expect the low to not occur at around 2015
Whenever the market decides to turn down in a massive bear phase, the retail stocks will frontrun the downtrend by at least 6 months.
Right now retail is still leading. No chance of a cyclical bear until the retail stocks, REITs and cyclicals enter pronounced downtrends.
For right now, the SPX 400 predictions is just another "Wall of Worry" item that will drive the market up even higher.
from your lips to God's ear. Robo-head says it...BANK it. You fuckin' idiot. Because it's always been that way...? That's the best you got?
Yeah, and massive amounts of freshly printed cash flowing into said stocks could NEVER sway your little indicator.
I guess the only way you can cope with the actions of the pigmen is to consider them to be almighty, and then forget about them, and ignore all that they do.
Can we safely presume from your "the retail stocks will frontrun the downtrend by at least 6 months" statement that when you see the rolllover in the retail, REITs and cyclicals you will publish your call of the top here on ZH?
If you are putting alll your money behind that broad statement - where will you be if those three don't frontrun the market but are instead pulled under by other market sectors?
barliman
I also think price history is misleading under these conditions.
The retail index can fail you Robo
Another interesting aspect of a top is when there is a price shock and former leaders lag the market, making way for new leaders. This is evidence of distribution.
More recently, Big Money has been moving out of concentrated positions in the Rock Stars into smaller and more diverse portfolios that are easier to exit. More evidence of distribution.
Big Money still plays mo mo during distribution, because hey, if the music's playing you have to get up and dance, but they are positioning to get out, and that's why you see the Russel 2000 leading the market and insane IPOs like LinkedIn. More evidence of distribution.
Speaking of IPOs, IPOs are another way to exit the market at the top and leave the public holding the bag. They are a tell when looking for a top, and we just had one hell of a clue that the top is near.
Distribution, smishtribution, it's probably nuthin', I'm going all in baby. Dow $tengagillion! This time is different.
Too Bullish. My target remains the only realistic one considering what's occuring globally.
Namely - ZERO!
It's not like Monedas to get morose ! I received a nice Email from a friend in honor of those who will never trade again ! http://www.usba.com/memorialday/ Monedas 2011
http://www.ritholtz.com/blog/2009/03/inflation-adjusted-dow-is-at-1966-l...
aw, shit, Muir...now that's just not fair. Playing dirty like that... introducing non MSM-approved information, trying to confuse everybody
Im sort of spooked out by the numerology of it all...bottoms at 666(satan), has peaks every 33 years(jesus died at 33). Freakydeaky, my tinfoil hat is warming up here guys(though i must admit, i cooked some fish in it last night...)
In other words:
THEOIL IS DRIBBLING OUT, compared to before, and because there's soon going to be the most monster paradigm shift since the extinction of the dinosaurs and before the sun turns red giant, meanwhile the powers that big time be are transfering the wealth of their nations into their private hedge fund accounts and telling everybody that most currency is worthless and besides inflation as big as the Ritz will be checking in as soon as this pesky little recession is over.
This is beyond sad 'technical' anal...
I need a second opinion, where is Abbey Cohen from GS who can pump the SNP up in a heartbeat
Don't know if Tyler wrote this but if anyone here on this site thinks technicals work or even matter anymore they need to lie down in a darkened room until the wish to trade passes. The markets are now totally rigged,Bernanke wants the SP500 to go up so it does,every dip so far has been buyable.
If anyone can seriously come up with an argument as to why after the last three years and trillions of dollars of money creation and market manipulation,he would just give up and let the markets find their own levels, please let us know. Until then articles like this just aren't worth the time it takes to read them.
I loved the charts. You are right, the only Technical aspect I need to know or everyone needs to know is Bendonkeys take on QE3 and beyond to support the Market. Govt Support more and more removes the free market. Why not just hang the Sickle and hammer Flag and get this crap over with.
I wonder what the technical charts were saying in Spring of 1929....."sell in May and go away" ? "Buy in June we're goin' to da moon !" ? Monedas 2011 "You are the bubbles in my bathtub !"....Cole Porter Fantasy Lyrics
So let me get this straight. The author finds there was a "33 year cycle" from 1949 to 1982 so there must be one from 1982 to 2015? Is that his reasoning?
Oh boy this is hilarious.
yup, whole case (and all respective trend lines) based on two data points, a flattened log chart, controversial inflation calculation and completetly random 50% fib retrace. My hunch is the author cannot even re-create the chart himself, thus overlayed over someone elses work.
Agreed, nothing works in this environment but doing what Ben wants. Still, if he had total control, the Dow would be at 14,000, so there must be some costs to manipulating, because the market is pretty much meandering right now. If he was able to continue to make it climb despite any costs, he'd do it.
The markets stopped rallying because he ran out of money? I don't believe that.
Maybe they stopped rallying because the Fed realizes they are not going to reinflate the economy, so they are just playing for time while they ready the new financial system. (yes, the gold argument again)
like the call..."based on technicals" of course. treasuries are clearly squawking "the gig is up" for somebody. "they don't call them bond ghouls" for nothing. obviously i'm a "full on Mad Max" end of the worlder myself. Have made a call for oil prices to collapse the last few weeks: "a whole Army of Mad Max's. WITH OIL NO LESS!" Anywho--who knows, right?
One must ask what this 33 year "cycle" actually measures before deciding whether the chart should be held upside down or right side up. One should also consider the massive ongoing failures of cycle theorists like the Elliot Wavers and Charles Nenner who are repeatedly humiliated for not acknowledging the fact that you can't use TA with dollars as a yardstick. It isn't hype, fashion, what is trendy, or crowd psychology that is calling the shots. We printed too much money in the form of debt that will never be paid and in most cases was never intended to be repaid.
No zig zag in the Euro, no raid on gold and silver, no central bank currency interventions are going to stop the dollar from continuing to lose purchasing power. I am constantly amazed by people spouting "strong dollar everything must crash" every time the dollar bounces. The strong dollar is a cult and the popular news is your Jim Jones. If you drink the koolaid, you will surely die a precise mathematical death.
and the economy must revert to mid 60's levels as well, but so far a number of things have held up, personal income, (spiked mainly by a huge expansion in entitlements) the dollar is litmus paper. in an economic competition its hard to see America losing this contest. (the Chinese will remain poor oppressed little worker bees)
everyone fears that tipping point, what if there is no tipping point? Bernanke and his people can reverse engineer any S&P chart you would like. this is about more than extend and pretend, its how to manage your position in a global economy when change is no longer a problem, and change is always a problem. in order to stop change (that's Obamas next campaign slogan, we need to stop change - that is if he were telling the truth, but lying is status quo)
the problem is how to cap technological change, its sorta like running out the clock in football. and in the global economy competition, America has the ball. Technological change is nearly zero, and the foreign competition can reverse engineer existing technology, but they aren't building anything new. don't look too hard at GDP numbers, China is a slave state, and theirs is twice ours. who cares?
when some invisibile Chinese fighter jet flies over DC and creates a sonic boom, and the POTUS says, what's that then perhaps we will get started again. meanwhile the economic changes that confront our society have nothing to do with the S&P. S &P 400 means a lot more to the rest of the world.
seriously, I despise those so called analysists who knows nothing.
Did anyone ask them if they will trade on this chart accordingly?
what a joke.
This is all assuming that industrialized governments will not collude with corporations to arrange fiat asset valuation. Why not? They've done it with money. They've done it with interest rates. If consumer demand plummets, if demand for stocks and/or even commodities crashes, why can't we make the now well-worn, too-big-to-fail argument that Coca-Cola needs to be saved by allowing mark-to-model valuation of that company (or any other) dependent upon some "panel" somewhere composed of good-ole-boys.
I'm sure they will use the same tired anti-capitalist arguments they have been using, i.e. "We can't let big-boy collapse hurt the little guy," and "It's a matter of national interest and security to keep big corporations strong." Just you wait. If push comes to shove, it will be fiat asset valuation supported by more austerity and slight-of-hand taxation for savers and productive workers (zero interest rates, inflation in necessities, increased health care costs, etc.)
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