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To: TRINDY who wrote (163058)	11/9/2008 5:24:22 PM
From: Dan3	Read Replies (1) \| Respond to of 306849

Re: Steve Saville has noted that the SPX seems to be forming an inverse head and shoulder pattern, forming a base for a potentially explosive rally. Do you hold any "truck" with such patterns? Cheers! The pattern that I find fascinating is that of a graph of the S&P 500 from 1990 to the present. You can get it here, by selecting "max" as the period in the top graph and then manipulating the sliders in the min-graph under the main one: finance.yahoo.com^GSPC#chart3:symbol=^gspc;range=19900102,20081107;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=off There's an amazing decades long double-top formation that is downright scary - it seems to point the S&P to a level of about where it is now, long term, and to about 500, short term. At least to my very inexperienced chart reading eyes. I sure like to hear what anyone with more chart reading experience thinks. The trouble with the inverse head and shoulders is that there are two "left" shoulders - and I'm not sure what, if anything, that means when considering it to be a standard formation.

To: TRINDY who wrote (163058)	11/9/2008 6:33:30 PM
From: Perspective	Respond to of 306849

Re Baa yields over the past year - thank you for pointing out the FRED link!!! I hadn't caught that before. It has been added to my daily chart review. Here's what the yardstick for stock multiples looks like: The 50% increase in Baa yields works out to a 33% drop in stock valuations. So basically the entire price decline in stocks to date is accounted for in the yield valuation shift! That leaves no room for the likely reduction in the earnings stream going forward. While some of that risk is obviously incorporated in the Baa yield, the message remains the same: with Baa yields here, either bonds need to jump and yields fall, or stocks need to fall to close the gap. And that's assuming that earnings aren't going to fall much (obviously not the odds bet IMHO). `BC

To: TRINDY who wrote (163058)	11/9/2008 7:01:27 PM
From: Perspective	Read Replies (1) \| Respond to of 306849

Re SPX double top: I guess I really hadn't given much thought to the implications of this. You can see a six year run off the 1994 base into the 2000 top, then seven years to the 2007 top. The implication would be a decline lasting six years to mirror the 1995-2000 bull. We'd bottom out around 2013, with the SPX back around 400. I actually put a lot of credence into the idea that we ultimately retest that SPX 400 shelf from 1994. That was the date the starting gun was fired for the credit bubble. I actually like 2014 a little more for the ultimate low, thanks to the four-year election cycle. By 2015, a second Obama administration should be spooling up spending for the 2016 elections. Housing will have likely bottomed, and the differential effect of Boomers shifting from savings to consumption should be just about done. Stocks should be completely ignored by then as well. `BC