If this rally runs out of steam, history suggests the next move down could plumb depths not seen in years.
If a C wave is imminent, a typical pattern is 2 (or 2.382-2.764) x A or a target of the '02-'03 and fall '08 lows, or even as low as the 500s-600s eventually. C = A would imply an idealized target in the 460s and nominal SPX 600s (US$ constant at the current level).
Note how relatively closely the SPX was tracking the currency-adj. corollary with the Nikkei until QE2 and "Operation Twist". Coincidence . . .? I suspect not. Had the SPX tracked the corollary as in '01 and '08, the SPX would be in the 800s-900s by now.Can the Fed and shadow banksters prevent for the next 18-24 months the historical tendency for the SPX to follow the self-similar cyclical and secular patterns? I suspect we are going to witness their ongoing desperate attempts to do so.
|Thank you, James M. ($60), for your astoundingly generous contribution to this site -- I am greatly honored by your support and readership.||Thank you, Alfred V. ($50), for your exceptionally generous contribution to this site -- I am greatly honored by your support and readership.|