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The State of the Trend

Can the combined efforts of Bernanke and Yellen match and exceed the records set during The Maestro's tenure? A YES answer, on a per point, rather than a per % gain basis, seems more likely by the day.

Consider this. At the end of last week, the '09 - '13 rally exceeded the '97 - 2000 rally in 90% of the time:

S&P500 Monthly Chart
Larger Image

The chart above also shows that the SPX advanced 1336 points from October '87 to March 2000. At the current rate of advance, the index could reach this target during the first half of 2014.

But let's not get ahead of ourselves and turn our attention back to the chart we posted last week. Currently, the SPX continues on target to match the 2011 - 2013 rally, which marked the beginning of QE III. That target is 1900, and if the index remains within the channel, it should be reached by the end of the year:

S&P500 Daily Chart
Larger Image

The flip side of this comparison with historical patterns is that once this rally runs its course, investors should expect a 50% + haircut. But that will be the topic for another day.

In the meantime, the trend for the major indices (DJIA, SPX, NDX) is up in all three time frames (daily, weekly and monthly).

On Thursday and Friday gold managed to pull back within the triangle, keeping hope alive, but still remains confined within three downsloping channels:

Gold Weekly Chart
Larger Image

Silver couldn't muster much of a rebound and is targeting the '13 lows:

Silver Weekly Chart
Larger Image

 

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