by Gary Christenson
There are patterns in markets. Yes, the Fed and High Frequency Traders influence markets, but we can learn from past patterns in the S&P 500 Index.
Using weekly data, the S&P made a high in March 2000, fell to an initial low in April, rose, and fell to a second low in October 2000. It rallied and fell below the second low in February 2001 – never to look back. From high to final low took 931 calendar days and price fell about 51%.
Examine the following chart and note the H, L-1, L-2 and a final low.