Stock Market Update - November 23, 2009

Does this Dow chart look familiar ... if it didn't have the dates attached I could have passed it off as today's chart. The market bottom of 2002 and 2003 looks very much like the market bottom of 2008 and 2009 ... to be exact ... it is exactly the same to date. It is uncanny of how history repeats itself. There was a low made in October and the final low made in March of 2003.

Fast forward to today. We had a low in October/November and made the final low in March ... down to the same week of the calendar in March. And look at the bounce ... we had some summer weakness just as the market did in 2003 (as expected in every summer market) and then we were off to the races once again in 2003 and again in 2009. I know what you are thinking ... what occurred after November in 2003. Go to the next chart ...

The market busted out into a higher rally until March 2004 before we had a correction that really lasted for about 7 months before the market made higher highs later in the year.

I'm not saying that this is going to occur again today ... what I am saying you just need to keep this in the back of your head when you are making trading decisions. A couple of points ... we have come further and faster than the 2003 market rally with higher unemployment and a really bad housing market but with lower interest rates. The economy is different today than it was 6 years ago ... much different. But I would not be surprised to see if the market does the unexpected and move higher ... much higher before it cools off. That would surprise most everyone and have others to push all their cash in over the winter and a leaving no other buyers for the spring market. Today, most everyone is calling for a 10-15% correction ... and the market always has a way of out foxing them.