Tuesday, May 01, 2012

NYSE Composite Update

I have posted this graphic a few times on here, both before the 2008 collapse and since. Without looking it up, I think the last time I posted this view of the NYSE Composite was right after the end of version one of quantitative easing. I may have posted it at a later date as well but it really doesn't matter. I have posted all of the labeling I keep on the chart for your review. I think it is the first time I have posted the purple semi-log trendline going back to 1982's start of the bull market that marked the 2007 top in the index.

Anyhoo, as I noted a few weeks ago, there is mounting evidence that the week of March 19th was a very important turning date in financial markets. I'm not quite as certain as most in the financial community that something beyond Operation Twist will be announced by the Federal Reserve. I think we very well may be finished with giving money to Wall Street to gamble in commodities and stocks. Many in the Federal Reserve appreciate the unintended consequences of greater suffering for people around the world. ie, Since commodities are valued in dollars, the entire world, especially the most impoverished, felt the wrath of quantitative easing one and two.

There are two ABC correction lines on the chart; the one in blue and the other in orange. As noted before, the blue ABC pattern is the one you should pay attention to. Again, there is no time element to this pattern. I am simply showing the pattern price projections overlaid on the NYSE Composite. Here's a little freebie.... While I never expected this ABC pattern to take so long to resolve itself, were I to guess the time element of its resolution, I would now suppose it to be 91 months from the 2007 September peak.

 Note that even though it has been three calendar years since first posting this ABC pattern's upward and eventual downward projection, the NYSE Composite Index has not deviated more than a handful of percentage points beyond its target of 8300. Regardless of the endless prognostications of the investor class, that is not good news. More and more evidence in our monetary system, our economy and the global economy is pointing to us putting in a major top at this price level.
Click on image for larger view

posted by TimingLogic at 9:36 AM

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