This weekend, a Sloper sent me his analysis of the market from the perspective of using 2003/2004 as an analog for 2009/2010. I must say, I found it intriguing (particularly because Gary Savage has also mentioned this analog). Here's a graph he put together comparing the present Dow 30 to the one from six years ago:
And here's a similar pair of graphs for the S&P 500:
I took a look at the Dow myself, and using the above analog, it seems we are approximately at where the green arrow is right now……..
If this analog prevails, the next low would materialize within the next few weeks at a level slightly lower than the prior low (let's call it 9642, just for the heck of it). Let me say right now that, if we get anywhere close to this level, I intend to cover every stinking position I have, while simultaneously shrieking like a little girl. The graph above is 2003/2004, and below is where we're at right now.
Where does this fit into my big picture? Does this mean I'm throwing 1937-1942 under the bus? Not at all. Nothing has taken place to do which violates my 1937-1942 analog; it's playing out beautifully so far. I simply think this phase of the market, highlighted in yellow below, might follow the 2003/2004 analog. So it's good to have a greater level of detail when trying to ride the much smaller waves.