Sunday, November 13, 2011

Detailed Historical Projections for the S&P 500

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See chart for details. The red rectangle is the expected price/time range for a bear market rally to top based on 2000-2009 comparisons. The green solid line is the average. Our market has already reached the average price gain. However, it would be more typical for the market to burn some more time, and make another minimal high above the Oct 27th high.

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The average bear market leg down since 2000 has been 110 days and about -26%. In this chart above I have projected that down from the end of the previously shown average bear market rally which is projected to end the first week of December. That would put the S&P 500 at 954 by the end of March. So we could look at Q1 expiration put options on the S&P 500 on a push to new rally highs over the coming weeks. The blue line I have shown in the prior post, which would be the typical bull market leg up.

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This chart shows some chart resistance lines with 1295 being the main overhead resistance that I think is of significance. The vertical lines show the upcoming Fibonacci time relations of the May-Oct decline projected out from the Oct 4th low.

The closest analog to the leg down from May-Oct is the 1st leg down in 2007-2008. The bear market rally to follow topped at a 0.40 time ratio which is an approximate 0.382 time ratio. That is where I think the most likely topping range is in our market. That would put us into the 1st week of December.

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