something to think about for monday, page-33

Below is a SP500 cash chart and it will be interesting if the monthly bars repeat the 2000 experience.

The blue ma is a 12 period simple ma on monthly.

In Oct 2000 the close was just under the line and the first time since 1998. Getting a sell that close to the break is always less risky than one miles away.

In Dec 2007 we get the first breakdown since April 2003 and once again it was very close to the ma making it as safe as you can get.

In 2000 the next month was huge down then unchanged the next and then up the next then big down the next two as you can see.

This time we got our next bar down big as before and the current month is down slightly but of course has nearly two weeks to go.

I hope we don't continue to repeat 2000, because it implies a rally into near March end then April and May hard down.

This definitely can be a possibilty as although Armstrong's late March would normally be expected to be a low, I have mentioned the 1973 scenario where the timing was perfect but the action was down not up.

This doesn't invalidate Armstrong as the timing factor is the most important and it is NOT a stock market indicator, but an economic confidence model that says that yes, a major turn in some intrument will change for the better but it isn't always the stock market.