Tuesday, December 8, 2009

These look familiar?

Do these two charts look familiar?

1999-2004 Nasdaq Bubble Collapse

1929-1934 (Dow Jones Industrials Crash)

These two charts have a striking resemblance. If we are indeed following the same market cycle that we followed during the Great Depression it is now 1938 and the market is getting ready to retrace 40% after a huge rally. Let's see what these charts look like after 1934 and 2004.

2004-2009 (Nasdaq Composite)

1934-1939 (Dow Jones Industrials)

The similarities are astounding. One cannot deny that their could be a connection between these two market environments. So, if these charts look the same what could be next? Let's take a look out to 1945.

1938-1945 (Dow Jones Industrials)

Looks like if history repeats itself we are looking at another nasty pullback in the market fairly soon. I believe this comparison is somewhat correct. Yes, history doesn't repeat itself, but it sure does rhyme. I look for a bottom in the stock market sometime around 2012. Any coincidence to when humans expect the world to end? That kind of pessimism is what it takes to form stock market bottoms. Kind of like when Hitler looked as if he would take over the world in 1942, right? Think about it.

The similarities are undeniable. However, always do your own due diligence. Good trading!


  1. great work, and excellent presentation. As always we will see what the market brings. Thank you for your energy and effort to share this with your readers.

  2. Robert, excellent work. Its funny but I was looking at exactly the same this weekend. Louise Yamada and William Oneill think the same thing and the correlation is striking. I was actually looking for software to overlap these charts but couldnt find it. If you dont mind I will mpost a link to this MB to take a look at these charts since its essentially the same charts I was going to post.

  3. Thank you for the comment MACT, go ahead and post the link to these charts. I believe they are very interesting. However, only time will tell if they are valid. Good luck.