SPX Overview

Here is a chart of the S&P 500 including dividends (red) monthly. I've included the 7.57% compounded growth trend since 1950 with a pair of over and under percentage brackets. The heavy green line is the actual S&P500 minus the 7.57% trendline (scaled as percent to right). I would expect to see the market move in the range shaded in pink, under the 7.57% trend but above the lower envelope.

S&P 500 including dividends (red) monthly
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SPX.X Cycles

The trading cycles seem to be stabilizing. What may be significant is that the dominant period has shortened from 55/110 days to 42/84 days. The 21 day period is a little sloppier.

Individual stocks seem to be doing their own thing as investors rearrange their portfolios to position themselves for 2010 and complete whatever tax loss selling remains. My current expectation is for continuing choppy weakness in the market until the 1st or 2nd trading days in 2010 which should be a tradable low. All this assumes the MCO behaves appropriately for the next couple of weeks.

The SPX daily chart with time cycles.
Expect market weakness until after New Years day.
Click to enlarge.

DJIA Midday 12/1/09

The DJIA at the start of December
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