The first one is the current decade breakout in
$SPX
compared to the one in 1980. As excited as many people get about this
breakout, notice how one more pullback was needed before the eventual
1982 low in the market:
The next one shows the Small-cap Russell2000 vs the Dow Jones
Industrial Average breaking out of a monster base. Isn’t this beautiful?
We’ve all heard about how great healthcare has done this year, and
more specifically biotechnology. Jonathan took this a step further and
plotted the Top 15 names in the S&P Healthcare Index minus the
biotech names. Look at the difference in the two charts. I think there’s
a mean reversion play here:
Everyone I speak to these days is bullish Japanese stocks. Do you
know anyone who isn’t? It’s almost an insult to someone if I come up
with a counter-argument. Well, here is a chart of the Nikkei running
into a mufti-decade downtrend line, as well as the exact measured move
from the 5500 point consolidation before last year’s monster breakout:
And while we’re on the Japan topic, here is the highly correlated
Dollar/Yen cross. And like the Nikkei, we’re looking at a mufti-decade
downtrend line as well as horizontal resistance:
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