If This Is Anything Like Last Year, Then Stocks Are Within Days Of Collapse

Thursday, July 19, 2012
By Paul Martin

Sam Ro
BusinessInsider.com
Jul. 19, 2012

For anyone who has been worried that 2012 would be repeat of 2011, we’ll soon find out if it’s really true.

Lance Roberts of StreetTalkLive just pointed us to this chart.

It’s the S&P 500 from May to September for 2011 and 2012. And the correlation is incredibly tight.

Here’s an excerpt from his latest blog post about the pattern:

I am not saying the same thing is going to happen this year. However, the current market rally is pricing in any potential action from the Fed which, in turn, is likely to keep the Fed on the sidelines for a while longer. With the continued deterioration in the economy, consumer weakness emerging, yields surging in the Eurozone, the volatility index sitting near lows and markets overbought on a daily basis, the risks are mounting for a sharp correction.

Furthermore, these risks become much more prevalent in August as Europe effectively shuts down for summer vacation. This means there will likely be little action, if any, coming out the Eurozone to head off any potential risks…

Chart…HERE

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