Thursday, February 25, 2010

S&P Weekly Consolidated Rate of Change -- Since 1959!



Hey, maybe Prechter has been on to something these many years after all.

And here is a log-scale chart of the SPX over the same period:



On the graph I included the Consolidated Weekly Moving Average (CWMA). It's at 1107 right now, right about where the index is trading. If you need to delineate between bull and bear markets this CWMA may be just the thing. Click on the graph above to enlarge and examine how the index has tended to move off the average at different points along the way.

And one more thing. I am going to say this in Public once, and only once: If the stock market ever drops below 666, the next bottom will be at 469. Why? That is for me to know, and for you to think me crazy if I told you.

The problem is that I am not positive that the market will break 666, I haven't made a firm determination about that yet. But if it does, then the number is 469. Write it down -- and keep your mouth shut.