Prelude to a Depression

More charts tonight!

Before our market takes another leg down later this year,
I want to walk you through both bears and illustrate how they match.
Fully analyze them.

We start here with the peak of the bubbles,
then the initial drop off the top.

1928-1929:
2003-2007:
First, just looking at the charts,
you should notice they are almost identical.

You can't see it on the 1928 chart,
but there was a 15% crash in 1 week in Dec. 1928 (the chart starts after that).
From there, the Dow regained all of its losses that month,
then traded in a range between 300-325 for Jan-May 1929.
This established support.

You also can't see it on the 2000's chart,
but I'm sure we all remember the 2000-2003 recession (chart starts after that).
From there, the Dow regained most of its losses that next year,
then traded in a range for 2004-2006.
This established support.

Eventually, both markets broke out of their range to the upside,
and made their final push to the top.

Once liquidity dried up in financial markets,
the bear markets began with declines back to the indicated support.

The next post in this series will begin analyzing the declines.