05 May 2014

Something Wicked This Way Comes for the S&P 500

We're going to use as few words as possible to discuss what's happened and what's about to happen with the S&P 500 this week.

First, looking backwards, we'll observe that stock prices are largely behaving as expected. Mind the notes in the margin of the chart below:

Change in Growth Rates of Expected Future Trailing Year Dividends per Share with Daily and 20-Day Moving Average of S&P 500 Stock Prices, through 2014-05-02

Second, looking forwards, because they are behaving so much as expected, our alternative futures chart suggests something wickedly interesting is coming this way.

Alternative Futures for S&P 500, 31 March 2014 - 30 June 2014 (With Echo Effect), Snapshot on 2014-05-02

We don't think it will be as quite as interesting as what this second chart suggests, but let's have this week play out and see how things develop. Hopefully, it won't be boring.

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