One of these correlations is going to fail

Since November 2009 I have been commenting on the eerie day to day correlation between the market (specifically SPY)  of 2003/2004 and 2009/2010.    These charts continue to track with November 16th’s closing value of SPY (118.16) differing only 0.28 points from SPY’s closing (117.88) on November 16th, 2004—six years ago.

 

SPY 2003/2004 vs SPY 2009/2010, click to enlarge

 

 

Recently I noticed another correction with the past—the market rally beginning in February 2010, versus the current rally that started in August.  Today’s closing is within 0.32 points of the April 27th close (118.48)—55 trading days into the twin rallies.

 

 

 

 

Twin rallies Feb and Aug 2010, click to enlarge

 

Soon one of these correlations is going to break.   In 2004 the market went into a sustained rally starting in November.  In May 2010 the February rally stumbled, with the aid of the Flash Crash into a significant correction.

My guess is that the market is going to be going down for a while…

 

 

 

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1 thought on “One of these correlations is going to fail”

  1. Can’t comment on the content of your post – forgive me, but I don’t know *anything* about this sort of discourse. Still, wanted to let you know that I think the blog design is really effective and I like the new logo.

    And – I hope you haven’t given up on your other blog personae.

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