S&P Significant Low Has Occurred – Not Likely

by Gary Christenson
Deviant Investor

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.

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