Wednesday, November 10, 2010

Measuring the Pullback

One hour into today’s session finds the S&P 500 index hovering just a few points above the 1200 level as weakness which began on Monday and accelerated yesterday has continued into the early stages of today.

Yesterday, in Looking for SPX Support Levels, I offered up a chartists’ perspective on how far the current pullback might extend. Today I am updating a table which has captured what I consider to be all the significant pullbacks since stocks bottomed in March 2009.

At only 1.9% peak to trough, the current pullback is not yet as significant as any of the previous dozen pullbacks. Using the table as a measuring stick, if the current selloff is able to muster enough bearish momentum to match the group mean, this would take the SPX all the way back to 1151.

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