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SPX Now and Then

SPX Now and Then

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Published by: CreditTrader on Sep 28, 2010
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10/19/2010

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Comparison of May06 to Peak in S&P 500 with Mar09 to Current.

Extremely correlated price action but three notable turning points show divergence BUT critically coincide with Govt/TSY/Fed actions. Green (end Dec09) was the open-ended support for FNM/FRE that the TSY announced. Orange (end Jun07) was BSC halting redemptions BUT was covered by a strong Fed statement and leaving rates unchanged. Red (mid Sep07) was first rate cut by Fed (inspiring support from quick action). Seems like we see major intervention as the only factors that alter the path of human emotions into this toping formation and arguably the Fed is running low on Ammo – today’s QE-reduced-fat version may be the sign.

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