Five weeks ago the Power of the Pattern reflected that two of the broadest measures of the stock market, were up against key resistance levels and that prices back in 1999 could impact portfolios today (see Party like its 1999).
Below is an update to how the NYSE and Wilshire 5000 have handled this resistance, 5 weeks later…
CLICK ON CHART TO ENLARGE
This weakness does not mean the mother of all bear markets is taking place or will. When is comes to portfolio allocations/risk allocation management, in the past, investors usually want to see these broad index’s going along for the ride. It can pay to reduce risk asset exposure up against long-term resistance lines and so far, for those that did, it helped them maintain higher portfolio values.
Until these two can take out key resistance, it does make the S&P 500’s rally and break above its highs of last May at little suspect!
Thanks for sharing Tom….any stats to what happens after the juice or what happens if the juice doesn’t work?
Chris
Dot-Com Bomb part I & Dot-Com Bomb part II with a pinch of Euro crisis, with a Housing Bubble / Financial crisis in between
Who knows what the Fundamental Value of anything is anymore, with the Fed / Central Banksters, meddling with the tool called Money
Technical Analysis seems most valuable now, in an attempt to determine a market’s direction
Today is one of three settlement days in May for the feds rolling MBS game. 60 today, 22 on 17th and 29 on 21st. Every month right around settlement time the market gets juiced.
last month it was 156 on 4/12, 22 on 4/17, and 63 on 4/19.