Important History Lesson: Part 2

Let's take a closer look at the stockmarket without showing it relative to the commodities index. This is the Dow Jones from 1929

This shows the DJI on an arithmatic scale.

This shows the DJI on a log scale.

In fact from our point of view the ARITHMATIC SCALE is the most important. I know as stockmarket professionals we are more used to using log scale charts, but in fact the arithmatic scale actually gives the truer picture.

Let's take a closer look at some of those periods:

We grew up in this period. This is the DJI from 1982 through to 2000.

Which was a fairly similar pattern to 1949-1966:

But for a decade we have been trapped in a market doing this (1999-2010):

This market has many of the same characteristics of the market from the late 1960s thro' to the early 1980s. This chart is the DJI from 1968-1982, when it finally broke out of a 14 years sideways trend. Noticed how the market DOUBLED AND HALVED several times in the period, but failed to breakout above the 1968 level until 1982.

But what is also, maybe even more disturbing about the pattern of the last 10 years, is that in some respects it more resembles the 1930s. This is the DJI 1928-1943

Although the collapse in 2000 or 2008 was not as severe as 1929, the 2003-2008 recovery looks much more like the 1934-38 recovery, which was followed by a collapse.