Thursday November 29 2012
I have mentioned a parallel with the start of the bear market 40 years ago right to this day. That was the worst bear market since the 1930s, the 1973-74 decline of 50% in the Dow.
Dow Industrials Daily late 1972-1973
The exact high was January 8, 1973 at 1047.86. It would be early 1976 before such levels were re-visited. Now let's fast forward to today.
I am not pretending that we are having a day to day repeat forty years later but this may be playing out in roughly the same time frame. The big move up from mid November is impressive, now above all the daily MAs. Here is my thought for hte day and the weekend. Could the market top out in the next couple of weeks back at 8500? Sure it could. Are we now in a third wave up or an A B C ? A three wave A B C might mean 8500 while a new five wave move could take us to new highs.
At top the action in the summation index is impressive. We will of course continue to track that and other internal indicators.
I will say that I strongly believe the same overall 1972-73 transition is playing out again forty years later. Exactly when the top will be remains to be seen. But once it is in place, one will only be safe out of the stock market.
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