Barron’s Michael Kahn looks at 2 periods of Dow Charts, and finds them surprisingly similar:
Kahn notes that the sizes of the 1998 decline and the 1998-1999 rally were twice as big as their current counterparts, but the structure of the action is very similar.
I continue to look at 1973 as my best historical analogy: After the
1966 peak, we had a major selloff, a rally towards new highs, and then
a 30% correction.
Kahn reaches this conclusion: If this model holds for 2007, then the market is in for a very choppy few months followed by the return of the bear . . .
History Paints a Somber Picture
Barron’s MARCH 7, 2007