Todays Markets?

I've been getting ask a lot about today's markets, and how much farther can they go. The simple answer is I don't know. In one camp you have many experts who believe the markets (the DOW) is still under valued, and can run to 12,000 by November. In the other camp you have experts who believe we've run to far to fast, and the markets are do for a correction. In my opinion I too believe the markets have rallied from there lows in early March 2009 extremely fast, but when they started falling in October 2007 they fell even faster. The best way to analyse whats taken place is to look at something similar, and there is only one other point in time that mimic's today markets. The Great Depression as far as the markets were concerned it started in late 1929. The DOW was trading at a high of 381.17, and by the end of 1932 it was at a low of 41.22. So from the peek to the bottom it took less than 3 years for the Markets to correct itself. Once the DOW bottomed in late 1932 it rallied for the next 4 years (1936) back to a 50% correction price of 194.44 . Two years later (1938) the DOW was trading back at 98.95, and was lower yet in 1944. It took until 1955 or 15 years for the DOW to make new highs that were set back in late 1929. I believe our current scenario will play out in a very similar fashion. Were in stage 2 of 5 stages. Stage #1 was the bottom in March 2009. #2 is our current rally which (could?) continue for several months or more. #3 is our retest of the bottom set in March 2009. #4 which may last for years while the markets churn for years while our economy works off its over capacity. #5 is many years later when the markets are making new highs. There are a few examples of horribly long lasting market conditions. One example was the DOW's trading range from 1960 to 1983 in which the DOW traded in a 300 point range between 700 and 1000. Look at a chart and you'll see our current bull market started all the way back in 1983 when the markets finally broke through the 1000 resistance area. example Another example is Japan. This country has missed out on the rest of the worlds market growth over the last 30 years. The cause was Deflation or in layman's terms OVER CAPACITY, AND A LACK OF BUYER'S, sound familiar?

Brad DeOrnellas
warfaretrader