Thursday, February 14, 2008

Roadmap for the near future (DOW circa 1929)

This chart (click to enlarge) shows the first leg down on the Dow in 1929. From peak to trough the first leg down was about a 50% drop (380 to 235). That long rise into the spring of 1930 was widely heralded as a "New bull market". However, the Dow subsequently declined to 40 by mid 1932. Basically a 90% fall in 2.5 years.
I predict a similar path will be followed this time. This initial decline will have many believing that it's "1987 all over again". Unfortunately, it's not 1987...