May

3

 G'Day,

I hope all is well. Just thought I would share this market coincidence with you.

It has been 42 months since the S&P 500 Index reached a monthly closing high of 1,549 in October 2007. The index is currently 12% below that level. I note that 42 months after the December 1972 peak the S&P 500 Index was also trading at approximately 12% below its peak level. Interestingly, both post peak periods were marked by declines in the order of 50% & when plotted together on a monthly interval (common base) look remarkably similar. If this path were to remain compliant then the index would peak just above 1,375 around July 2011. After this the path suggests an 18 month pullback in the order of 15% to 20% followed by new highs sometime in 2015 (approx. 7.5 years after the 07 peak). It appears to me that 42 may be the consistent theme with respect to the above consilience. The number 42, in The Hitchhiker's Guide to the Galaxy, is the answer to the "Ultimate Question of Life, the Universe, and Everything". Perhaps Douglas Adams was right.


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