Most charts seem reasonably useless right now, so I thought I’d just play around and look for some interesting stuff.
Although the market has been heading lower over the last couple of weeks, the fact remains that most stocks are still relatively cheap when comparing them to prices 2+ years ago – not to mention that many of the companies being trashed right now just came off good earnings.
Anyways, I wanted to see exactly where the S&P 500 currently matches up against the highs hit 2 1/2 years ago and I noticed something interesting – a reverse head and shoulder pattern (learn about it).
In the chart below, you can clearly see the price target that was created with the head and shoulder pattern syncs up with the top created in April. Not surprisingly, MarketClub called this top to the near penny all the way back in July of 2009 (see the original video analysis).
Also (not shown in the chart), the top that was created in April coincides with the 62% retracment measuring from the top hit 2 1/2 years ago to the bottom created last year.
Obviously, none of this means much now, but it shows you how cheap many things still really are.