Five weeks ago the Power of the Pattern reflected that two of the broadest measures of the stock market, were up against key resistance levels and that prices back in 1999 could impact portfolios today (see Party like its 1999).

Below is an update to how the NYSE and Wilshire 5000 have handled this resistance, 5 weeks later…



This weakness does not mean the mother of all bear markets is taking place or will.  When is comes to portfolio allocations/risk allocation management, in the past, investors usually want to see these broad index’s going along for the ride.  It can pay to reduce risk asset exposure up against long-term resistance lines and so far, for those that did, it helped them maintain higher portfolio values.

Until these two can take out key resistance, it does make the S&P 500’s rally and break above its highs of last May at little suspect!

How The Recent Decline In Stocks Looks "Eerily" Like Major Bear Markets Of The Past