Thread: The Market could be topping

That chart is unsettling but that drop won't happen overnight. Volatility is up and Ebb shows us that the ups and downs can be played.

Originally Posted by Show-me

I'm 100% in but this chart still haunts me at night.

I'm not haunted by that any more.

Here's what we were shown (correlation 80%):



I put the numbers of that index into Excel, only spanning more years. Here's what it showed (correlation 63%):



Posted here in March (maybe I should update the file to see the new correlation):
Here comes S&P of 600

For a while, I discussed the SPX forming a head and shoulders pattern. After the inverse head and shoulders blowout thanks to the Fed, the idea of SPX completing a head and shoulders pattern may seem silly, but the only major difference in market conditions since talking about the right shoulder forming is the Fed rate cut. Most of the economic problems still exist. Had the Fed disappointed the market, we would be probably be talking about a neckline break. Whether the market could truly be manipulated for any length of time can be debated. But in the end the market will follow its own course. If this cup and handle thing comes to completion then the bears better just pack it up because the bulls will be off and running. But if the SPX isn't able to get the job done, then lets just say the position of the right shoulder was manipulated because of the Fed rate cut and the market may just head lower to retest Aug lows. Concerning the Elliott Wave Thoery, I think we're at the top of a-b and may start b-c (but a breakout of a cup and handle pattern will kill that bear). I can't believe it, I think I'm sounding more like The Technician. I still think you can't fight the Fed, but I just wanted to go on record with this theory as silly as it sounds.

http://stockcharts.com/school/doku.p...nd_shoulders_t
http://www.acrotec.com/ewt.htm

spx 9-26 mod 1.jpg

Originally Posted by vectorman

SP500 8-24-07 with 50 day ma

Attachment 2002


http://stockcharts.com/school/doku.p...nd_shoulders_t

Originally Posted by tsptalk

Yikes - that would be a 1200 target on the downside if it plays out.

spx 7-14 mod.JPG

http://bigcharts.marketwatch.com/adv...asp?symb=SP500

Looks like Tom called it last year. I guess at any point in time somebody is calling the correct outcome way in advance. I just wish it was always the same somebody.

vectorman called it and Tom did the math.

That is really freaky that it NAILED 1200 right on the dot.

Originally Posted by fabijo

Looks like Tom called it last year. I guess at any point in time somebody is calling the correct outcome way in advance. I just wish it was always the same somebody.

The bad news is that we have the new head and shoulders pattern to deal with. The downside target (if it breaks) is about 1050.