YOU HEAR A LOT OF "DOW HISTORY" THEORIES THESE DAZE...
THE NOTION BEING...IF "THIS HAPPENED"...AND THEN "THAT HAPPENED"...6 MONTHS LATER...OR ONE YEAR LATER...
IT TELLS US SOMETHING VALID ABOUT TODAY...
THE PROBLEM WITH MOST OF THIS "HISTORY" IS THAT IT COMES FROM THE BUBBLE YEARS...
WHEN THE MARKET WAS BEING GOOSED BY THE FED...AND THE US WAS STILL A "REAL ECONOMY" NOT THE CURRENT "ZOMBIE" IT HAS BECOME.
FOR MOST OF MARKET HISTORY THE FED WOULD "TAKE THE PUNCH BOWL AWAY"...
BUT AFTER THE PASSAGE OF THE 401K IN 1982...BUBBLES BECAME THE "NATIONAL POLICY" OF THE FED...
WE ENTERED A PERIOD OF SERIAL BUBBLES...
AND ATTEMPT TO USE DOW HISTORY NEEDS TO COMPARE "APPLES TO APPLES"...AND NOT BE INFLUENCED BY THE BUBBLE PERIOD NOW ENDED...
A BETTER USEAGE OF HISTORY WOULD BE TO LOOK AT THE MARKETS IN THE 30'S AND 70'S....WHEN WE WERE A STRUCUTRAL PROBLEMS ...SOMEWHAT LIKE TODAY...
ANY MARKET HISTORY FROM THE 90'S NEEDS TO BE REJECTED STRAIGHAWAY...
THE BUILD UP PERIOD FROM 1982 TO 1992 SHOULD ALSO BE DISCOUNTED...
ANYONE WHO ATTEMPTS TO "PROJECT" ANYTHING OFF THE 1990'S BUBBLE PERIOD...COULD BE IN FOR A BIG SURPRISE...
