When Will the Analog Terminate?

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One of the very few unpleasant aspects of doing a widely-read blog is that, from time to time, I get a nasty email. Here's one I got yesterday:

from Mark Everett <markeverett00@yahoo.com>

to trader.tim.knight@gmail.com

date Sun, Aug 15, 2010 at 12:10 PM

subject 1937-42 Scenario


You're a naive idiot if you think the market is going to exactly repeat the 1937-42 pattern, and the way you've "counted out" the moves and presented them in your blog says you're basically expecting an exact repeat. This just shows that you're an example of how moronic most traders are nowadays, looking for a pattern on a historical chart and lining it up with today's chart and saying "that's the future." I'm as bearish as anyone and have been for over 10 years, but the "Big Picture" section of your website is idiocy and show that you could use a class in logic.

Mark Everett

I guess I should be flattered that Mark took the time to create a new email address just to send me a nasty note (this is a common practice among trolls), but this does raise a point I've been meaning to make about the analog.

I've been very vocal about the 1937-1942 analog, but some might wonder what happens when "1942" is here (e.g., the bottom, which I imagine is going to be somewhere between 600 and 650 on the S&P).

The short answer is: we'll be in a different market then, and I have no idea what will be next. I consider the analog to be useful for this bear market; after it's done, I'll have to think hard about what to do next.

Because the general outline of the analog has held up so well, I'm keeping my faith in it until it is completely broken (which might never come; we might make it all the way to the terminus of the analog without missing a beat).

I have, along the way, been updating my Big Picture page, and I've kept all the "amendments" in there, which includes plenty of misfires. But The Vision has kept its course beautifully, and I am looking forward to the next big move down.

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