1) S&P 500 in 2007-2008 Vs 2014-2015
o Look at the similarity between the price action in 2007-2008 Vs 2014-2015.
§ 2007-2008 = Green
§ 2014-2015 = yellow
o If price was to continue and look the same one would expect to see a move lower in the S&P 500.
2) S&P 500 In Pre-Election years – comparing 1935 to 2015 ?
- I attached the performance of the S&P500 Index since 1931
- Using pre-elections years in the US
o Blue – Pre election
o Yellow – pre election year and year ending in 5
o Green – years ending in 5
- One can see that the S&P performed best in pre-election years ending in 5 (1935, 1955, 1975 & 1995)
- I also attached the chart of 1935 which is very similar to 2015 in many ways
o Market crashed in 1929 and in 2009
o In 1935 the main theme was deflation which is very similar to market talk these days
o 1935 was pre-election year and so is 2015
o Both years ending in 5
- In 1935 the S&P rallied 41%, it first fell in the first quarter 16% (equivalent for a move to 1,758) and then rallied till the end of the year, if this was the case in 2015 expect the S&P to move lower till March (16% from the top would target 1,758) before rallying till year-end.
- Judging 1935 I think the S&P can move lower towards 1,700-1,750 before resuming its uptrend
S&P500 1935
S&P500 2015 ?
Very similar background between 1935 and 2015 and very similar price action between 2007-8 and 2014-15, take a look