Dow 32% off peak... how much more to go?

[sniglet]

[Dave0]

Sniglet. I always wonder after reading your posts... where are you putting your money? Are you stashing it under a mattress? Maybe shorting stocks? Just curious.

[sniglet]

[david_mcmanus]

In other words, sniglet has made A LOT of money over the past few months. Oh, I miss the days of shorting WM...... sigh.....

[buyStocks]

The secular bear market will empirically bring all short or mid-term speculators to their knees, most likely also including sniglet. I've contemplated the inverses and futures, but the problem is that you can't predict the next huge rally, which happen unpredictably during secular bears. Pretty much the equivalent of gambling. Let us know how your strategy works over the next couple years.

[rose-colored-coolaid]

[buyStocks]

[Scotsman]

Stolen from another site:

Comparing the current market action to that of the 1929 Dow Crash, some interesting correlations may be playing out. The '29 to '32 collapse could be seen as an A-B-C. A(381-200) B(200-295) C(295-41).

If you flip that A-B-C over and match the 41 to the 14,000+/- high of this market, then the current leg(A) should bottom @ 4600-4800 with a retrace to 8000-8200(B) then a final leg to 1400-1600(C).

If the time period required plays out then the final bottom should be in by mid to late 2010.(intervention may extend)

Some other interesting tidbits. The 2007 high is roughly 37X the 1929 high. A low of 1500+/- would be 37X the 1932 low. Using the A-B-C described above, each leg in this market would be roughly 37X each leg of the '29 to '32 market. Who knows what effect printing, etc. may have on the final outcome.

[rose-colored-coolaid]

I really don't think you can use stock market action during the great depression as an exact play-by-play for 2009. The lesson you can take is that bear market rallies can be breathtaking, and yet they can still be erased in the blink of an eye.

In general, I think this recession will be less bad than the Great Depression in almost every way: lower unemployment, less stock market losses, and generally less pain. The one way this crash will be worse - housing prices will plummet more peak to trough than they did during the depression.

[EconE]

[rose-colored-coolaid]

Your point about unemployment calculations changing is probably spot on. That more people own stocks is just another reason we can't expect identical stock action.

[perfectfire]

About unemployment being calculated differently has been posted around here several times already.

[david_mcmanus]

Whew, glad to see this bear market is over with. Now, let's run this puppy back up to 15000 by the end of the month!

Yes, I'm being sarcastic.

[sniglet]

Sharp rallies (such as we saw on 3/10) are the hallmark of bear markets. Dramatic, swift, rallies ONLY occur during bear markets. Moreover, the more dramatic the uptick in stocks the more likely new lows will be reached in short order.

If we were going to have a long sustained rally (of a month or more, say), then we should really be witnessing a slower increase in stock prices, spread out across many days.

In short, sharp rallies just scream SELL!!!

[perfectfire]

on unemployment as calculated during the depression era.