One of these was the SPX bottom finding chart. When I first posted it up on the 6th, it was somewhat concerning because of the implied risk for a reversal even though the indicator itself wasn't as reliable at finding tops as confirming bottoms. Here's an update of that chart to the right. On the plus side, the market didn't exactly leap upwards since then. On the 6th, SPX opened at 931 and Friday it closed at 831. I guess that's actually not too bad all things considered. This chart still confuses me a little bit when it's viewed over the span from Q1/2007 until now. Strangely, the spikes in risk for a bear reversal on SPX keep getting higher and the bottom spikes continue to be more shallow, forming a channel of sorts. Why speculators should be getting progressively more risk-a-philic puzzles me. Perhaps everyone is just getting more comfortable with the new market realities. The next sign-post I'll look for on this one will be around -0.50 and at that time it will be interesting to see how other SPX analysis is doing. This is the height of earnings season and so anything can happen.
Sunday, January 25, 2009
Revisiting Old Charts
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