The surprising day-to-day correlation between SPY in 2004 and SPY in 2010 continues. The 21-September closing values were 112.96 (2004), and 113.98 (2010)—not exactly a rousing endorsement of buy-and-hold strategies.
This year’s SPY has traded below the old SPY line since mid August, but it just crossed over, challenging the top 2004 trendline (see below). It appears that the scary months of September and October were pretty boring six years ago, with SPY trading in a tight range. SPY’s volatility in 2010 has been quite a bit higher, a trend I expect to continue.
While in general I don’t believe that the past reliably predicts the future, I think we are in similar economic times and the investor psychology is comparable (remember the tech bust?). I expect this correlation to continue.
- When an Index Becomes a Security
- SPXH—Hedging the S&P 500 For Free?
- A Tale of Two Bulls
- Prediction: Dec 31,2013 S&P 500 close at 1468.38 up 2.96%
- Prediction: Dec 31,2012 S&P 500 close at 1418, up 12.78%
Tuesday, September 21st, 2010 | Vance Harwood