View: SPX73-2012.gif (545×397)

Next up, a long-term chart (from 1973 to the present) of the SPX, adjusted to the trade-weighted U.S. dollar. Were this basic A-B-C pattern to hold, the SPX will reverse sharply in 2013 and fall to the nearest trendline around 600, with a drop into the 300s possible. Yes, yes, I know it's "impossible" since the "Fed has the market's back," but the Fed may have to buy most of the market if it wants to keep it elevated at current levels.