Click on the image to enlarge. To keep the chart simple on the cycle models, I use the absolute value of the z-score, since it is a symmetrical function. In this case, the sign value (+ or -) shows the direction of the expected reversal. Thanks to Greenface over at daneric's site for asking the question that inspired this.
Viewed in a historical context, this EOD chart suggests we are approaching historical extremes not seen since the mid-50's as well as other economically unpleasant periods in the past.
Edit on 2011.110.12 at 16:30: I prettied up the chart and used EOD DJIA data rather than the 2:00 PM market price level. The story is the same.
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