I’ve been away from posting for a couple weeks but nothing has changed. The ValueLine Arithmetic Index is below the mid-October high and has been treading water.
The Dow Jones Industrial Average from 1929-1942 has provided a near perfect Roadmap of the Nasdaq since 2000 (as perfect as things get in the markets). Price bounced 63% from March to November 1938 just as it has bounced about 71% this year. If the cycles continue to play out as they did 60-70 years ago, the market will drop over 20% from here. The subsequent test of the November high will fail but will provide a 30% plus trading move.
The drop from the 1938 high lasted about 150 days. Assuming the high is in on the Nasdaq we see that a 50% retrace of the March to November move in 150ish days will end next spring. A test of the high in 150ish days (as in 1939) will move the next top to August 2010. Note that the current “high” may not be in on the Nasdaq and I will adjust the projection accordingly if the October high is taken out. I do not expect price to go much higher but those in charge like to play with the big indices to try to influence to masses.
The ValueLine Arithmetic index is my index of choice to monitor market health. At this point price looks to be putting in a head and shoulders top and a move down to the 50/50 point is similar to the projection on the Nasdaq.
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Tags: Market Outlook · Roadmap4 Comments
Andy – hope all is well.
Really missed reading your commentary!
What are your thoughts on the US Dollar?
Some are saying there is a potential for a rally
Hope everything is OK Andy, glad you are back.
thanks andy, is today nov 16, one of your cycle dates
Andy
Glad to see you back and running the charts
I do really enjoy watching your work!
WB