Analysis of Economics

[cdrom]

DJIA PARALLELS: THE 1930’s & THE 2000’s

The close similarities between the timing of the New York stock market in the 1930’s and 2000’s were first commented upon by David Chapman. There were remarkable parallels of about 70 years in the major shifts in investor sentiment between the two eras. The markets peaked after the two of the greatest stock market manias in US history, then crashed in October 1929 & April 2000. The market finally bottomed two years later in July 1932/October 2002, which was followed by a secondary low in March 1933/March 2003. Both markets recovered to record a ‘flat’ 1934/2004, in which the market tended to move sideways. The share markets experienced boom conditions in 1935-36/2005-06 with new highs being recorded. Corrections occurred in April 1936/May 2006, but the markets quickly resumed their upward momentum to set new highs. The 1930’s experienced a major peak in March 1937 and entered a protracted bear market, bottoming in March 1938. It remains to be seen whether this will be repeated with a peaking of the market in coming months followed by a serious market downturn.

Will there be a record peak in 2007? Will the panic of October 18, 1937 be repeated in October 2007? Will a low happen in March 2008, following trends as in March 1938. As always only time will tell.

http://www.davidmcminn.com/pages/19302000.pdf