September 06, 2012
– Comments (14)
update of the usual figure displaying the S&P 500 index (see this post).
I don't recall how you calculate this (spline?), but it does seem like a 2nd range/boundary might be in order.
see comment #38 here. Thus the spline interpolation (suggested by anchak in comment #24 here ;)) makes produces that smooth curvy green line by "interpolating the closing values of the S&P 500 index".
binve has suggested an additional "boundary" in comment #5 here. I am suffieciently optimistic to believe such a line will not really be all that helpful in the next few years ... ;)
To be honest, I'm not sure how to use this chart. And I can't find an explanation in your notes - though I'm sure there's one somewhere. Personally, investors have been climbing a wall of worry for years now and sentiment is still bearish on equities. Fundamentally, US profit margins have probably peaked, revenues will struggle to grow and it's difficult to see PE multiples expanding. As others have commented, the printing presses are open around the world, and investors continue to depend on central banks to come to the rescue. But who can time these things?
I'm not sure how to use this chart. And I can't find an explanation in your notes - though I'm sure there's one somewhere.
Well, my main point was that there was a decent chance of the rally "following that green trend line". I think it is pretty obvious that it has for a few years now ...
The trend channel, introduced a few month later was to show a not terribly large area the index would rarely leave during the rally. Obviously the index has returned from all its (mostly summer) vacations so far.
If in doubt you might want to show the figure to a little child. It will probably get its meaning within a few seconds ... ;)
how to use this chart
As long as you believe in the "continuation of the pattern" the answer to the "how to use the chart" question should be fairly obvious ... ;)
Nice porte, back to the green! :)
Still banging on that bottom line ;/