Friday, February 27, 2009

DJIA adjusted for inflation

This fascinating chart was published by Chart of the Day on Friday morning. Note lower channel levels, an area that seems inevitable before this bear market is finally over.

Here is their commentary:

Chart of the Day

For some long-term perspective, today's chart illustrates the Dow adjusted for inflation since 1925. There are several points of interest. For one, the inflation-adjusted Dow has gained a mere 55% since its 1929 peak and gained only 10% since its 1966 peak – not that impressive considering it took many decades to achieve those gains. It is also interesting to note that based on an inflation-adjusted Dow, the current bear market actually began in 1999 only to be interrupted briefly by a multi-trillion dollar credit bubble. That bubble has burst, of course, and the Dow now trades at a level not seen since 1995.



Anonymous said...


David said...

A couple of days ago Alex speculated we were in 4 of 3 of intermediate 5 of primary 1, which was what I had been working off as well.

I loaded up on shorts yesterday as it appeared that 5 of 3 of 5 of 1 was beginning. So far so good.

As I see it we have some more downside to come next week before this wave 5 is taken care of. Allan's cycle charts are calling for an intermediate bottom in stocks and top in VIX next week, which supports my idea that 4 of intermediate 5 will then be commencing. Am I on the right track, guys?

Agree on the oil, gold, and bonds calls and it was nice to know my own analysis is on the same page as that of this blog. But I've decided not to take on oil. I don't know why but for some reason it just scares me. I've stayed out all the way down and that's turned out to be a wise decision. I'm going to stick with TBT and DZZ.

Anonymous said...

How can you inflation adjust something that has changed its components continually over the years? I think that chart provides bno real insight into the market historically...just saying.

Anonymous said...

noooooo!!!!!!!!! You said 6000 was the low!!!!! I can't wait for 4000!!!!!!! no!!!!!!!!!!!!!

mlomker said...

>Am I on the right track, guys?

Sounds right to me.

I took a partial long position at the open today. I think there's more upside potential for the next week than down at this point. We will know soon enough.

Singlengle said...

Jts wait til we all own AIG ! That is in your future and will get you to 4350