Market Anthropology: SPX Analog Update

Thursday, February 16, 2012

SPX Analog Update

Here are a few charts to consider of the 87/88 post crash analog. 

In hindsight, you could make the argument that the sharp weakness in November and the air pocket in December added fuel to the topside on the backs of the bears. In essence, the trap and springboard was pulled back even further than the analog – as readily apparent in where we sit today. 

In terms of a prospective pivot, the market is now displaying the analog’s criteria of a negative divergence in the daily RSI
For more information as to why I have utilized this analog since August, here is a quick video from early December explaining some of the rationale behind it.