Seeking Alpha
Profile| Send Message|
( followers)  

Many traders have been following the 1974 analogy to the current market. The Dow Industrials have traded in a remarkably similar pattern to the Dow in the 1973 - 1974 time period.

According to the analogy, the market is now due for a major advance of 50% - 70%. In the chart below, the current Dow Jones Industrial Average is pictured in blue, while the 1973 - 1974 Dow is a black line.

Dow today vs 1974

Source: Bloomberg

The following chart is a closeup of the current market versus the market in 1974. The comparison basically shows that the market should not make a new low. In fact, it should begin a rather strong advance within the next several days, otherwise the overlay will disengage.

Dow today vs 1974 closeup

Source: Bloomberg

Also see: If You're Bearish: Time Has Run Out for a Rally

Source: If You're Bullish: Time for a 70's Party