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.
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.
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…