I hope everyone is having an enjoyable President's Day weekend…this holiday is an interesting reference point for the market. Usually, if the market has been able to rally into President's day, especially closing near the highs…that's a marginally bullish sign for the outcome of the year. However, this time around things are a little more interesting. First of all, we are trading on abysmal volume at EXTREMELY stretched prices…during EXTREMELY unpredictable times.

In the past history, when we have traded this strongly into this time of year that has bode well for the rest of the year…except when we do so on paltry volume and over extended prices…in both of those cases…in 1937 and in 1931…the results were spectacular and resulted in over 40% declines for both years. The average return for entire year in which we trade into Presidents day strongly is 14.46%. We are currently up 7% for the year…that leaves us a potential, if the internals for the market were strong, of another 7% gain by the end of the year…or alternatively the potential of a 55% decline, as in 1931, if the market internals are a masquerade.

Here is an interesting chart…

Additionally to this, we have the Nasdaq 100…which I am re-posting in this blog entry (not inspired by Steven Colbert Colbuffington Re-post) with additional markups on the chart and comments because some people seemed to not understand that the significance or my the markings on the chart. The two red trendlines are exactly the same number of points. This indicates a classical type of market symmetry in that the bounce from 2003 is almost exactly equal to the bounce from the 2008 low…additionally, there is minor but not insignificant time symmetry also which is indicated by the comparison at the top of the chart. Markets love to behave symmetrically and this one on the Nasdaq 100 is a very strong pattern indeed.

for high resolution views of the above charts you can click on: SP500 Analysis or Nasdaq 100 Symmetry