It's the End of the World As We Know It, One Month Later

° As I said a month ago, not a forecast, just observation.
° The S & P 500 closed Friday (3 ottobre) exactly on the optimistic longterm trendline. (Today, 8% collapse in Milano, not so jolly 4% in New York.) What does breaking this trendline tell us? What we knew already, that the financial climate that has prevailed since the mid-nineties no longer obtains.
° What would it mean if the S & P retreats another 20% or so to the conservative longterm trendline in the 850ish area? (Well, it would mean some very very unhappy investors, that's for sure.) If the S & P reaches 850, and holds, it means that the secular bull market, that America's economy, can revive and grow from a lower level. If the S & P reaches 850, and falls through, it means . . . .
° I've about given up on that condo in Ecuador. Now I'm more thinking a trip to the Mexican Market and a Boone Pickenslike investment in dried beans.
° Though my friend at the Y is clearly wiser, he plans to fill his closets with nutritious and heartwarming scotch.--Giac

Chart drawn with software from Ultra Financial Services

It's the End of the World As We Know It

° Not a prediction, just a big If. The upper trend line rises from the 1994 bottom that led to the great Greenspan blow-off; the S&P can fall another 15% from current levels (127) without interrupting the secular bull market. The lower trend line rises from the 1982 secular bottom; the S&P can even fall to this level (85 something) without terminating the secular bull market.
° But if the S&P should eventually rupture even the lower level, it will set up a secular double top at 155.
° It would be the end of the world as Americans know it. Time to relocate to that $30,000 condo with maid service and Quechua organic veggies in Ecuador.--Giac

Chart drawn with software from Ultra Financial Services.