Early 80's Market Correlation

Discussion in 'Trading' started by circadian, May 26, 2009.

  1. Looks like we're about to "Rock the Casbah."
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  2. volcanik


    interesting correlation
  3. Thats interesting. What software did you use to make that correlation? I guess its valid at least until we get a break of the January high. It would be interesting to see the same charts for Gold, Oil and bonds.
  4. I know that many are eye balling the inverse H&S setup on the S&P that has been developing all year long. I would just like to make an observation with regards to the H&S setup:

    Since the market meltdown of last year, inverse H&S's on the S&P have underperformed (failed most of the time) on the larger timeframes. I have eagerly awaited the completion of many of them this year, and they tend to leave one high-and-dry. There's just an absolute lack of volume and follow-through above the neckline. I'm not saying that ALL of them failed, just the vast majority of them. This isn't that shocking, as we're in bear market. I wouldn't count on the big one with the 950 neckline being the one that actually performs like it's supposed to (reach 1200 S&P). Seems a little too wishful to me.

    Chart is from MRCI data BTW.
  5. thanks for that. Are you an MRCI subscriber? Personally Im still very open to the possibility of another leg down. Real capitulation before the real recovery. Not sure if god, oops I mean the government will let that happen though.
  6. No, I do most of my own data analysis, but MRCI is fine. Another leg down is in the bag, but I guess the real question is "how low will it go?" It might only be a 1/2-2/3 retracement of this mega rally, or it could be a double bottom, or worse...but who really knows. I just think that for the sake of economic recovery we don't see a 5 handle on the S&P, b/c it'll kill so many more companies and confidence. Economic recovery will be pushed back in time, and Fed and Treasury will triple our currenct monster deficit just to ensure low credit spreads and high index futures.