1998/99 versus 2006/07
Barron's Michael Kahn looks at 2 periods of Dow Charts, and finds them surprisingly similar:
1998-99
2006-07
Kahn notes that the sizes of the 1998 decline and the 1998-1999 rally were twice as big as their current counterparts, but the structure of the action is very similar.
I continue to look at 1973 as my best historical analogy: After the
1966 peak, we had a major selloff, a rally towards new highs, and then
a 30% correction.
Kahn reaches this conclusion: If this model holds for 2007, then the market is in for a very choppy few months followed by the return of the bear . . .
Source:
History Paints a Somber Picture
Micahel Kahn
GETTING TECHNICAL
Barron's MARCH 7, 2007
http://online.barrons.com/article/SB117329999735629962.html
Friday, March 16, 2007 | 07:00 AM | Permalink
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Important caveat: M. Kahn's job is to fill column inches between ads, not to generate alpha.
In short, if he could trade and make money, he would, as it pays much better than journalism.
Cheers.
Posted by: lurker | Mar 16, 2007 8:30:49 AM
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