Here comes S&P of 600

[fabijo]

... or that's what was suggested by this chart genod shared in September.
Remember when we all first saw this? It was scary then, and seems even more scary now:

in his post here about the Homebuilder's sentiment index:
http://www.tsptalk.com/mb/showthread.php?t=3313

 

[tsptalk]

Compared to the choppy action of the prior 10 years, the decline of the housing index is quite precipitous. If (BIG IF) the market follows, the ability to "sell the rallies" will be few and far between. Kind of like the difficulty we had with buying the elusive dips during the past 7 months.

 

[weatherweenie]

What a way to start the week. Glad I'm in the G and F funds.

 

[Birchtree]

1320 on the SPX is a 9.5% correction. You don't scare me with that prognostication of SPX of 600 unless you have a tornado in your pocket.

 

[James48843]

I think we'll see about 1324, and that will be about it. It may take two weeks to get there, but that is about where I think the bottom is.

 

[fabijo]

1320 on the SPX is a 9.5% correction. You don't scare me with that prognostication of SPX of 600 unless you have a tornado in your pocket.

I know it won't scare you, Birch! I don't believe that chart a bit. I'm actually surprised at how many people on the board are taking these hits pretty calmly.

 

[nnuut]

It's all part of the learning experience. It will hit them later, I know. One of the main reasons this site is here is to teach people when to get OUT of the Market. It seems to me that the curriculum didn't cover that subject?

 

[DAWG51]

... or that's what was suggested by this chart genod shared in September.
Remember when we all first saw this? It was scary then, and seems even more scary now:

in his post here about the Homebuilder's sentiment index:
http://www.tsptalk.com/mb/showthread.php?t=3313

Long time lurker, seldom poster - Just curious to hear more comments about this chart. Sure does look like an established trend. (God, I hope not). Thanks,

 

[fabijo]

Long time lurker, seldom poster - Just curious to hear more comments about this chart. Sure does look like an established trend. (God, I hope not). Thanks,

Personally, I think whoever created the chart was just trying to find something to scare people. I just ran the HMI data starting from 1985 and put the monthly S&P 500 data with it (lagging it a year, so S&P data starts Jan 1986) to see what the correlation was. Excel calculated a correlation of 0.63. Below is what it produced. I wouldn't call it an established trend. We need to think longer term than "moments" when two charts seem similar. I could probably find a chart that has a similar shape during a different time period to find a correlation between my grades at school and the S&P 500.

 

[DAWG51]

Thank you

 

[fabijo]

No prob. I probably should've done this check before posting the other chart.