An Update On Meridian Market Theory -- And What Happens Next After Europe

Since floating the Meridian Market Theory in late March – the market has respected the meridian and was subsequently strongly rejected by it.

To simply discount this chart as novel and cute in light of the recent market swoon – would be ignoring historical precedent and a possible outline for what lies ahead.

MMT

I find it quite interesting that from a structural (price) perspective, the previous two trading environments (1994 and 1987) where the market was rejected by the meridian are quite similar to our current structure. Namely, there was a waterfall decline – followed by a trading range that initially appeared as a bearish continuation pattern – but was in fact just a consolidation before the market returned to the primary trend. 

 

With the daily comparisons to 2008, it should be noted that the primary difference from a structural perspective is the equity markets were working towards resistance – not support. This gives credibility towards my suspicion that once the markets works through the many issues in Europe – the primary uptrend will resume.

MMT
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 This post originally appeared at Market Anthropology.

 

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