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Investment Analysis Clubs / Macro Economic Trends and Risks
|Subject: Control Panel: Oversold?||Date: 11/19/2012 2:20 AM|
|Author: WendyBG||Number: 408909 of 504611|
I posted a short Control Panel on Friday morning.
I concluded that the SPX was a falling knife that had further to fall.
Brian (sitkapacific) concurred and posted a chart.
jgc123 wrote, "For a possible contraindicator to your indicators, the vanguard utility index, vpu, just bounced off of its 200 day average like it did in August of 2011."
Brucedoe wrote, "I expect this to continue until a solution to the "fiscal cliff" becomes apparent."
qazulight wrote a post analyzing the technical patterns (head and shoulders) and said, "All I am looking for is a nice bump to enter some more short positions."
The reason I post the Control Panel weekly (not daily) is to focus on signal, not noise. To bring out the signal even more, here is the 40-year chart of the SPX (courtesy of Dr. Mike Klein). The Y axis is logarithmic, so exponential growth shows as a straight line.
As all METARs know, the SPX bull market started in 1982, after Fed Chairman Paul Volcker raised Treasury yields and broke the back of inflation during the 1980-82 recession. The chart shows this clearly.
The big drops are the bursting of the tech stock bubble in 2000 with the bottom set in March 2003 and the