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John Lounsbury
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John Lounsbury, Managing Editor and Co-founder of Global Economic Intersection, provides comprehensive financial planning and investment advisory services to a small number of families on a fee only basis. He has a background which includes 34 years with a major international corporation, 25... More
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  • Chart of the Day - Inflation Adjusted Dow 5 comments
    Oct 23, 2009 1:35 PM
    From http://www.chartoftheday.com comes an interesting chart, to which I have added three long-term cycle shapes (black "domes").  The implication is that, if we have seen the long-term cycle lows this past March, this long-term cycle is different from the last two cycles.

    Themes: DJIA, stocks, cycles
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  •  
    Very enlightening. It takes a minute to adjust your mindset......to what is a proper scaling (every doubling).

    What stopped you from moving the suppport line even lower, where it would just touch the bottom of the second dip?
    23 Oct 2009, 02:42 PM Reply Like
  •  
    Hmm?!:

    The only things I supplied in the graph are the added shapes for the three cycles peaking in 1929, 1965 and 2000-2007 (double top). They were selected that way because that is the visual pattern I saw in the chart.

    I didn't define the red and green lines defining the trend channel - they came with the chart from ChartoftheDay. There are possible lines that could be drawn other than those provided.
    23 Oct 2009, 04:19 PM Reply Like
  •  
    I like this chart a lot.

    I think the key words are "Inflation Adjusted". There's no telling if we may reach new nominal heights.

    Thanks for putting this together.
    23 Oct 2009, 10:03 PM Reply Like
  •  
    I see it differently from the other commenters. A double-top often implies a significant reversal. And, why should we the Dow be going up related to inflation anyways? The most logical long-term direction seems to be retracing down to 5,000.
    24 Oct 2009, 11:23 AM Reply Like
  •  
    bobdark,

    I am not sure I follow your comment. I see the chart and the cones on it pretty much supporting your conclusion. It does not look like the DOW could go a whole lot higher, without breaking through the cones? Within the cones, we should be revisiting DOW 5000 pretty soon.


    On Oct 24 11:23 AM bobdark wrote:

    > I see it differently from the other commenters. A double-top often
    > implies a significant reversal. And, why should we the Dow be going
    > up related to inflation anyways? The most logical long-term direction
    > seems to be retracing down to 5,000.
    25 Oct 2009, 01:07 AM Reply Like
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