I enjoy long term charts. It allows me to drown out the noise and find the signal. I find this chart interesting. What we're looking at is a monthly candle chart of the S&P 500
SPX
The moving averages used are 10 month MA and 24 month MA. Looking at a chart since 1995 the index has closed below the 10 month MA a total of 13 times. 10 of the 13 times the index preceded to test or close below the 24 month moving average.
It could be coincidental but I find that correlation interesting. If January closes below the 10 month MA then there's about a 77% chance of trading down to the 24 month MA. (Assuming the correlation is valid) Considering how far above the 24 month MA the index is currently trading the decline could be sizeable. That would represent another 14% drop from where the index currently sits and it would be about 20% from the high.
Coincidence?
SPX
The moving averages used are 10 month MA and 24 month MA. Looking at a chart since 1995 the index has closed below the 10 month MA a total of 13 times. 10 of the 13 times the index preceded to test or close below the 24 month moving average. It could be coincidental but I find that correlation interesting. If January closes below the 10 month MA then there's about a 77% chance of trading down to the 24 month MA. (Assuming the correlation is valid) Considering how far above the 24 month MA the index is currently trading the decline could be sizeable. That would represent another 14% drop from where the index currently sits and it would be about 20% from the high.
Coincidence?
