Chart of the Week: S&P500 3 year chart
The SPX chart below shows that the rally that started with
the Iraq war remains intact. Note that the uptrend line has withstood several
tests since the rally began.
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Chart of the Week: S&P500 3 year chart
click for larger chart
Source: Technimentals
Despite several years of events beyond anyone’s expectations, the rally continues to hold firm. We have seen leadership rotate from Tech to Homebuilders to Energy to Utilities. Now, we may be seeing a rotation back to Tech. That would be preferable to a market led by either Energy or Utilities.
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Quote of the Day:
“The word ‘crisis’ in Chinese is composed of 2 characters:
the first, the symbol of danger; the second, opportunity.” -Anonymous
Wednesday, November 09, 2005 | 08:30 AM | Permalink
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» Whole Foods and the S from The Stalwart
Barry Ritholtz found a good chart yesterday showing that the SP's recent low and subsequent rally conforms nicely to the general trend of the index over the last three years. In his entry, he speculates that we are in the [Read More]
Tracked on Nov 10, 2005 9:07:53 AM
Comments
"we may be seeing a rotation back to Tech. That would be preferable to a market led by either Energy or Utilities." I hear that a lot. Why? Energy at least makes a lot of money. It it just because you don't want one sector pulling all the weight while everything else flounders? (Like tech in 1999-2000).
Posted by: Brian | Nov 9, 2005 10:31:29 AM
“The word ‘crisis’ in Chinese is composed of 2 characters: the first, the symbol of danger; the second, opportunity.” -Anonymous
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I see this a lot, but apparently it's not true.
And the continuation of this debt-driven expansion is most likely a fantasy as well.
Posted by: foo | Nov 9, 2005 10:37:29 AM
'Cause true market leadership is something that reflects a sustainable cyclical expansion.
Energy tends to suck all the air out of the room -- unless you are a commodities driven economy (ie, Canada or Australia)
Posted by: Barry Ritholtz | Nov 9, 2005 11:02:44 AM
Foo:
There's a Simpson's episode where Lisa Simpson tells Homer that the Chinese use the same word for both 'crisis' and 'opportunity'. Homer agrees, saying, "Yes . . . CRISATUNITY!!"
Maybe that's where it started.
Posted by: royce | Nov 9, 2005 2:52:16 PM
A market led by tech suggest an economy led by investments that lead to greater productivity and higher standards of living.
A market led by energy implies higher energy price with major negative implications for standards of living.
Posted by: spencer | Nov 9, 2005 4:08:35 PM
Good one spencer. Exactly what is an energy led market rally for the major energy consumer country in the world? Canada might now be enjoying something of this sort but only because we are customers they can count on, so far. Are we supposed to imagine an alternate energy program? Could we entertain the prospect of conserving fossil fuels and devoting resources to non-oil R&D?
Not until we are bleeding badly, I fear.
Posted by: calmo | Nov 9, 2005 7:33:41 PM
here's my theory - trendlines are drawn to be broken - if you draw a trendline from the march 03 low to any major low/(turning point) on a weekly S&P chart they've been broken - every one. technimentals can't even use the march 03 low because of that. so now they have to use the aug 03 low - which has worked so far. all i am sayin is i am weary of one single trendline to determine where the market is. technimentals could roll out a trendline from the march 03 low that shows its been broken IF they want to SELL the bear case. I hope it holds........i just try to retain some sort of skepiticism.
Posted by: chad rich | Nov 10, 2005 11:50:13 AM
Chad Rich and Barry - I am having problems replciating the same trend line on my bloomberg.......ah August low in 2003 - but that was not a low......March was the low....just as you say Chad Rich......trend lines are there to be broken......heres one for the technimentalists - the count of 14 day RSI oversolds versus Overboughts as a great indicator of market turning points......worked in the last low of the market for the European markets. Have not applied it to the US yet but am sure that if would look pretty funky
Posted by: DAN | Nov 11, 2005 11:03:47 AM
