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>I noticed an amazing, exciting (although a bit frightening) correlation between the
>periods 1986-1987 and 1996-1997.
>I guess that other traders probably made this recent discovery.
>I have attached the chart of SP500 Cash with the 2 above periods overlapped: the result
>is a correlation of 93 % !!!
>A proverb of my country says(translated from french): "Comparison is not reason"
>But maybe sometimes there can be exception to the rule. If this comparison between
>87 and 97 proves to be good until the end of the chart, the market recovery that started
>yesterday - tuesday aug. 19 - should only last some days (in 1987, this B wave rally
>lasted 19 days, then the market crashed into Wave C).
>
>Another interesting parralel to be made is that at the last top of August, as in August
>1987, several indicators (like MACD, RSI) presented NO divergence - making as if new
>highs were still to come.
>
>We will see...comments welcome
There is indeed a strong correlation between 1987 and 1997 in PRICE
only. What al these comparisons fail to point out that there is a
huge difference in the Federal Reserve's posture. Then interest rates
were climbing and they are steady now.
I'm a technician at heart but you can't ignore a central bank's
attitude. They simply have to much affect on the markets.
James A. Roush
jar@xxxxxxxxxxx
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