the recent high in this ratio closely matched the geometric mean of the 1999 top and the 2011 bottom of 2.771 (actual high was 2.821).
so that is a 50 per cent retracement on a logarithmic scale.
I also see some similarity in the chart pattern over the last year and a half and the topping pattern from 1997 to 2000. obviously the time frame and magnitudes are different, but structurally they look similar.
I've received a handful of emails this year asking me for my outlook on the stock market. I try to point out that I haven't made an accurate call on stocks since the Fall of 2011, so I'm not sure why anyone would take anything I say regarding the broader market seriously. but, still, I've had a numerological target in mind for some time: 2004 on the $SPX. recent highs have come to within less than a per cent of that number, so the recent weakness doesn't surprise me. but a retest or even minor new highs wouldn't surprise me either. plus, what I am looking for at this point is a sizable correction, not necessarily the advent of a full-on bear market. that remains to be seen.