The Stock Market Level To Watch

Dana Lyons ( makes an interesting observation about a little-known index known as the Value Line Geometric Composite Index. In his article, he draws a straight line (red) at 500.00. and says. “This far and no further.”
He misses several points, which I would like to address. First, by drawing a horizontal bar, he misses the fact that the XVG was 27 points under it in 2000 and 23 points above it in 2015. By drawing a line that is peak-to-peak, you get a different picture. In fact, what comes to mind is an Orthodox Broadening Top (I added the lower trendline to complete the formation). This is a slight variation of what you see in the DJIA and SPX.