kocurekc

If it's a the top, where is the bottom

BATS:SPY   SPDR S&P 500 ETF
240 4 3
Thanks "andrewunknown" https://www.tradingview.com/u/andrewunknown/

Just wanted to take a look at where a normal business cycle would take the markets. Historically, bear market corrections happen at a rate which is 3-times the bull market recovery. The slopes of the two corrections and recoveries over the past decade seem to be in line. We appear to be tracking a similar recovery slope.

If this was "near" the top (this is not a top call), a normal correction (circa 2000's slope), we would see the market correct back to a level ~1210 on the S&P             , bottoming around Aug 2015. If we have use the slope from 2008 corrections, be would hit around ~1150 S&P             , June 2014. I think the first is more likely as we haven't had enough time to build up a bubble market.

(Unless maybe inflation turns on, but QE should effectively keep this in check)
(Failure in China could be a good catalyst to start a health down trend).

Agree with your downside projection thesis-handle as I've observed much confluence suggesting this area to be very important strong support. Of course, it may not hold (and that would be very bad). I'm starting to wonder more and more if we are in fact in a "bubble" currently. Up until a few months ago my answer would have been a resounding "no." I can't say that with the same conviction I have previously. I'm starting to become suspicious that Bernanke has gone a wee bit too far - a la Greenspan in 2004/5/6 - by being too afraid to back off the throttle. A little correction wouldn't be the worst thing in the world to most traders, but as we witnessed last month, any such pullback terrifies the Fed. Market participants should be frightened by Fed member's back-talking as this is an indication of enormous insecurity lying just below the surface. To me, it suggests the slightest hiccup could derail the entire experiment. But then again, thinking hasn't done anyone any good in a long time in this market...
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I agree: nice work here! The implication of the original chart is that a correction of this magnitude will occur: this is a solid, well-reasoned scenario.
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A nice addition to andrewunknown's original chart.
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