Note from dshort: Chris Kimble's technical look at the Australian Dollar posted earlier today (here) reminded me that several months have passed since my last look at the benchmark All Ordinaries Index. The All Ords is currently 13.8% below its interim high, set on April 11th of last year, and 36.3% below its all-time high in 2007. Here is an update of my All Ords S&P 500 overlay.
What would the S&P 500 look like without the Tech Bubble? Perhaps something resembling Australia's All Ordinaries Index. I've included the S&P 500 in the background to support the idea.
I'm not a technical analyst, but the twin peaks in the S&P 500 over the last dozen years looks like a double top. On a smaller scale the shape of the All Ords since the 2009 trough also has a bit of "twin-peaks" appearance.
There are some who might view the All Ordinaries dramatic 56-month rise to the 2007 peak as a bubble. While the All Ords may indeed have become frothy, it's no match for a couple of widely acknowledged historic bubbles.
Footnote: Why the linear regression in the top chart? I included it merely to give a sense of what a mathematically precise line through the daily closes would look like. The regression divides the closes so that they are, in simple terms, evenly divided above and below the line.