Back in October I wondered if the Dow was not heading for 2,000. Today I see Louise Yamada has been saying something similar, even using a similar graph. But this chart gives me something else again to base the estimate on. (Click to enlarge…)
In 1929 the market started a slide that eventually wiped out almost 90% of its value. 34 months after it started, the crash of 1929 left 10% of market value standing. If we began a similar slide in October of 2007, then we are on a course that would leave us with a Dow of 1,400, just 10% of it’s 14,000 high. My estimate of 2,000 starts looking generous. We’ll see.