Stochastic Fractals on S&P500 Weekly Charts

Here's some S&P500 observations on the weekly charts.. Note the similar stochastic fractal patterns recently. A repeat pattern of the prior period. Price moved higher on the weekly without producing any MACD negative divergence with price. Now look at the same stochastic fractal in 2003. Same pattern with Price, MACD, and RSI. What followed was a continuation of rising prices.

Fractuals are entirely different as measure from the gradient the 2003 run from 800 to 1130 was completed in the whole swing from 666 to 945. There was a consodilation phase in 2003 which the 2009 run had ommited It retrace the some gains after 2004 run. The second phase of the run is much weaker from 870 to 1090. where are already in the second phase. where corrections are usually large. The correction could take the whole run from 870 to 1090. It if does correct from 870s we will get a slower sustainable run like other normal bull runs. The fractual match the 2001 crash and 2002 correction and down trend of that era.

It's a fascinating comparison borland - one that I've been watching since July when the market confirmed it's primary bull market status. Here's a chart I posted a month ago making those same comparisons between 2009 and 2003. The difference here, evidence that argues against the "run for the roses" a la 2003 is that, very much UNlike late 2003, now 9 days off the bottom of November 1, the NYSI and the MACD of the NYSI are still down trending. Though internals were weak in late 2003, that were not THIS weak. Not even close.

Now to add insult to injury, the NYSI is actually the strongest sector of the market with the Financial (XLF), small cap S&P 600 and Nasdaq McO summation indices having plunged into bear market territory lately - even as the major indices are making new recovery highs. See charts at bottom.

I think the jig is up. Good trading, D

And speaking of echos (phase II echoing phase I), Below are MACD's of the NYSI for 2009 (upper chart) and 2003 (lower chart), as a sort of continuation of my string below. The phases of each advance are easily seen with aid of the MACD this year as in 2003. The similarities between 2009 are 2003 are, I think, striking, as this year echoes 2003. If it indeed plays out the same, then we have one more pullback to perhaps the 1000 area, then the final 'run for the roses' into 2010, before a meaningful IT decline. Just my view. D

http://stockcharts.com/c-sc/sc?s=$NYSI&p=D&yr=1&mn=0&dy=0&i=p72349161033&a=178151037&are=5548.png
http://stockcharts.com/c-sc/sc?s=$NYSI&p=D&st=2002-09-01&en=2004-01-01&i=p27177833900&a=177884449&are=359.png

Don, I realised it's not that easy to cover your eyes!!!