In 1937 All Over Again I laid out the case that we are following the pattern of the original double-dip, the reversal in 1937 that broke the hope of coming out of the Great Depression.
James Shaw at SeekingAlpha had first suggested this pattern back in 2008, and updates his analysis today. The chart is a bit busy, but you can see he overlays a simplified pattern of our market on top of the 1937-42 market. If the pattern continues, here is the roadmap:
- flat for the rest of August
- bounce in Sept/Oct
- sharp drop in Nov/Dec
- sickening slide for two more years
- new low in 2012