A new bullmarket in NYX - the New York Stock Exchange

Here is an image of the front page of today's New York Times. At the top left you will find a story about the New York Stock Exchange. It tells us that the exchange has fallen on hard times because of new competition from electronic markets and it generally paints a bleak picture of the NYSE's future.

At the top of this post you will see a weekly chart of NYX, the common stock of the NYSE-Euronext, the parent company of the exchange. The panic of 2008 was not kind to NYX - the stock had lost more than 80% of its value at its low point in March of 2009.

Here we have a classic contrarian combination. A devastating drop in a stock coupled with a bearish front page story about the company in the New York Times. Icing on the contrarian cake is the fact that the 200 day moving average of NYX (red line on the chart) has turned decisively upward in the face of a lot of bad earnings news.

I think NYX will move much higher during the next fifteen months. A reasonable expectation is midpoint resistance that stands near 74 (purple dotted line).