NYSE Composite Update

We have shown this chart of the NYSE with Andrews Median Lines in numerous forms over the past four years.  First to show how extended the market was before 2008’s dump, then to nail the bottom support level of that collapse and then to target the ultimate downside of equities after the Federal Reserve squirted money into every financial orifice imaginable.   The last time we showed this exact graphic was early in 2010 where we explained the blue ABC patterns.  The blue ABC pattern in 2000-2003 is replicated with the exact dimensions on 2008’s collapse with an anticipated downside target.  If we see nature repeat itself with the same pattern this cycle, we can expect the NYSE Composite’s downside target to be in the area of 1500 to 2000 or a drop of 85% from the 2008 bubble peak. 

The NYSE has now, for the first time, hit the upward rally projection of the blue ABC pattern.  That rally projection is coinciding with also reaching the linear regression line going back to the beginning of the massive bull market started in 1982.   In other words, heavy resistance exists in both nature’s pattern, the linear regression line and the Fibonacci retracement level.  And now what we have is potentially a massive head and shoulders formation.  Remember, as we have said numerous times over the last six years, the equity market is many times more expensive than right before the 1929 collapse. 

In the last few days Ben Bernanke commented on how constructive quantitative easing has been because stock prices have recovered.  I was floored by the complete ignorance of that remark.  You should be too.  That may have been his most idiotic statement since telling us how great the housing market was right before its collapse.   Quantitative easing could have been used for the good of the country, for our people and for investment.  But instead he gave it to criminals on Wall Street to re-ignite the Ponzi raping and pillaging of America.  To piss money down the drain by wasting it on completely worthless and unsustainable pushing around of paper.  Markets or nature eventually punishes every ignorant belief.  This one will be punished as well.   And if that starts in a significant way before 2012, President Obama is history for supporting an environment of fraud and corruption.  And I believe this environment will unravel before then.