Higher Highs and Lower Lows
Instead of comparing previous market performance from the peak, Doug Short lined up previously collapses from their bottoms. Interestingly enough, we are right in line with the performance bounce of the Great Depression.
(Note: He used the Dow for the Great Depression and you’ll notice the Great Depression crash was only an interim bottom as it revisited and fell through that level.)
I actually believe the current situation we are in may be worse than what happened to the economy in the Great Depression. Yes, there is a chance that the insane Government spending saves us in the long run. But, I do not put much faith in the Government and think that there is a serious threat to our currency and debt rating, both of which will crush the US economy.
That said, I think that we could actually trade higher from here on this rebound. I don’t know how much, maybe just a few weeks worth (although with the move of the markets overnight, we might have just seen the top). Of course, that means we drop lower on the fall over the next several years…
*image source: dshort.com
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