In mid-August I pointed out that the selloff that the S&P 500 was in at that time was different than past selloffs, technically.
Since early 2012 every selloff in the S&P's (CME:SPU14) bull move was almost a “carbon copy” of the previous one up until the one that occurred this August. The one and only difference this time was the major key reversal top on the monthly chart. That had never occurred before and technically could make a difference as technically that suggests a trend change from up to down.
The question was, would it be enough to finally put a longer term top on the market? It was not. That key reversal top on the monthly chart was taken out yesterday. So now what?
The last major break in the S&P was in October 2007. It totalled 921.00 points. The next steepest decline after that one occurred in 2011 and the correction was only a third of what occurred in 2007. So when will one comparable to the 2007 one occur? Isn’t that what everyone is waiting for? But let’s back track.
In March 2000 the S&P 500 topped and corrected 807.00 points. (That’s close to the category of the one that occurred in 2007). That was a 2 year, 7 month correction. It then rallied for five years and topped in October 2007 again. That is when the 921.00 drop occurred. That took 1 year, 5 months. That bottomed in March 2009. So there is somewhat of a pattern here in terms of corrections.