Is it over? How will we know? The answer of course is we don't, but we can get clues from near past behavior. Following is a spreadsheet of the state of the the current pullback in several indexes. You can see that we are right near or at the statistical average of all the pullbacks from the start of the current bull run. (the way I count it there have been 8 retracements)
So we sit right in the sweet spot.. How will we know that the current retracement will be larger than the past. A couple of clues. The first will be when the majority of the indices moves below the +1 standard deviation number. You can see that the N100 that has led the pullback is already at 105%. The second clue is when the the indexes approach the 100% number on the Max column. This represents that the pullback in that index is at the maximum of the the previous 8 retracements. This is a live spreadsheet and the values as they cross 100% will begin to light-up as we hit new lows.
Since %max is a superset, that is hitting %max will also have the +1dev number light-up, I have included the price targets necessary to hit %max on the tracked indices:
*note - google finance does not have a symbol for either the Russell 2000 or the Value Line index. I am using IWM as a proxy for the R2K in the % calculations. I do not have a suitable proxy for the Value line.. If you have any good proxy ideas or a real time web source for either of these please let me know.
Happy trading..
-rlt
