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See atteched: (1) a comparison of SPX comparison versus the Nikkei,
with the Nikkei normalized to agree with the S&P 500 top and
extrapolated forward in time, (2) a similar plot comparing the
NDX 100 to the Nikkei.
A few observations:
1) the SPX and Nikkei agree closely in their behavior heading into
the top, however the SPX made another attempt at the all-time high
and the Nikkei just kept dropping.
2) the SPX appears to be lagging the Nikkei by about three months,
and if the S&P were to perform similarly to the Nikkei, we might
expect a massive spike down sell-off to the 800 level, or about
a -30% drop, then a bounce above 1000, and a subsequent drop to
the 600 level, which works out to about a -50% drop from current
levels, or -60% from the closing high.
3) By analogy to the Nikkei, the initial market bottom would be
in the late 2002 to early 2003 timeframe. However, those lows
would be retested agin 2005, and would eventually give ground
further in 2009, attempt a rally in 2010, and ultimately collapse
in 2011.
4) The NDX comparison isn't as close. The NDX outperformed,
by climbing more rapidly into the 3/27/2000 top, and has collapsed
much faster than the Nikkei. This rapid drop would argue for
an ultimate much lower low, to visit perhaps the lows of 1997,
in the 800 area, a fulll 80% to 90% off from the 3/27/2000 top.
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