Nasdaq-Dow Analog - The Top Has Been Reached

I firmly believe that the U.S. Equities market top last week on Thursday is of a long term nature and that we are about to enter a one to two year bear market in U.S. equities.

I have been closely following the zig-zags of the recent Nasdaq market compared to the Dow during the period from 1924-1937, as you can see in the chart below, and last week it appears that the ultimate top in 1937 lined up with what could be a major top for quite some time. As you can see from the charts, if history repeats, or even rhymes, we will have a rough road ahead.

Here's an updated chart of the analog between the Dow in the 1930s, with the peak of the 1929 high synchronized with the 2000 peak in the Nasdaq Composite Index:

You can also read this trading idea on MarketHistory.com

Comments

[Dave]

Sir,

Today, 1/11/08, I came across this blog and noticed your comparison with 1930s to the indexes and looked it up at Google Finance. I like blogs where predictions are retained and can be historically checked.

You were pretty much spot on:
http://finance.google.com/finance?chdnp=1&chdd=1&chds=1&chdv=1&chvs=fixed&chdeh=0&chfdeh=0&chdet=1200085200000&chddm=22175&cmpto=INDEXNASDAQ:.IXIC;INDEXSP:.INX&q=INDEXDJX:.DJI

Indexes peaked about a week after your prognostication (10/19/07), and have slid since. So 1 or 2 years is a big difference, now that it has fallen, as you predicted, is there a better prediction on 1 or 2?

Kudos, Sir. I will spend a bit of free time reviewing your other posts and how any predictions fared. Curious if you've said anything about gold.

Regards,
Dave