Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Stocks

Stock Market Finally Breaking 2008 Analogue

by January 12, 2023
January 12, 2023
Stock Market Finally Breaking 2008 Analogue

Price pattern analogues are fun to find and track, as long as one understands that the correlation is never going to be absolutely perfect. And the additional point that must be understood is that every pattern analogue breaks correlation eventually — they most often do so at a point in time when you are most counting on them to keep working.

This week’s chart shows a pretty thorough breaking of correlation with a prior pattern, in this case the bear market of 2007-09. It has been working nicely throughout 2022. The letters in the chart are just a means of identifying points of similarity between the two price plots. The correlation of the two patterns was a little bit weaker in the beginning, at the left end of the chart, but got tighter as 2022 wore on.

If the stock market in 2023 was going to continue following this pattern analogue, then we should be seeing a sharp decline right now, the echo of the stock market’s drop in September 2008 occasioned by the collapse of Lehman Brothers. Instead, the stock market is showing nice strength in January 2023, setting up hopes for the “January Barometer” to indicate a bullish year. That omen of stock market behavior has some statistical problems, as I detailed here back in 2019.

But people can still believe in something which the statistics do not support, and that can create market excitement for a while. Whatever the source of the new strength, and whatever its long term meaning might be, the strength we are seeing now in January 2023 is a definite break from the 2008 pattern, and so we can file this one away as a pattern analogue that was fun while it lasted, but which has broken its correlation and should not be expected to work any more going forward.

As a final note, one of the ways that an analogue can start to break correlation is that we may see the patterns invert, still matching the timing of the dance steps of the prior pattern, but doing so inversely. It may be that we are seeing that now. But any pattern which is fickle enough to invert its correlation is also fickle enough to disinvert without notice, so one should not count on that performance in this case.

0
FacebookTwitterGoogle +Pinterest
previous post
Illinois lawmaker seeks legalization of psychedelic mushrooms
next post
Returners to work set to be allowed to keep disability payments

You may also like

At the Edge of Chaos: Short Sellers, Higher...

August 22, 2022

Fibonacci Says Upside to SPX 4300

May 20, 2023

If It Weren’t For These 7 Stocks…

June 5, 2023

The Halftime Show: Under the Hood — Short...

April 24, 2023

DP Trading Room: New Calculation for CPI Could...

February 14, 2023

Can You Really Predict Stock Market Success Using...

December 2, 2024

Three Thoughts on Risk Management for October 2024

October 9, 2024

Market Stayed Strong During Difficult Week

July 29, 2022

Get Ahead of 2025 Stock Trends!

December 4, 2024

The Wisdom of Jesse Livermore, Part 7

June 7, 2023

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • TSA tells Americans their Costco cards won’t fly at airport security despite love for hot dogs

      June 7, 2025
    • Trump announces China will restart rare earth mineral shipments to US after productive call

      June 7, 2025
    • Musk feud presents ‘unprecedented’ dynamic compared to past Trump disputes: expert

      June 7, 2025
    • Snub of Musk’s NASA nominee ally preceded sudden ‘big, beautiful bill’ criticism, Trump feud

      June 6, 2025
    • Supreme Court rules DOGE can access Social Security information

      June 6, 2025
    • US sanctions money laundering network aiding Iran as regime faces nuclear reprimand at IAEA

      June 6, 2025

    Categories

    • Business (8,149)
    • Investing (2,019)
    • Politics (15,558)
    • Stocks (3,134)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved