Willem Grooters in the Netherlands occasionally emails me his thoughts on the current S&P 500 relative to the Dow Crash of 1929. Mr. Grooters draws a line between the 1929 high and the 1932 bottom, noting the coincidental oscillation of today's bear around this line. His analysis of trailing 12-month earnings suggests that this pattern may continue — that the current correction could well take us back below the line.
I should emphasize that the line on this chart is arbitrary — the shortest line between two dots. It's not a regression, and the only thing it shares with the S&P 500 chart is the 0% starting point. However, if we let Excel plot a linear regression on our current bear, the slope is remarkably similar to Mr. Grooter's red line. Click here to see.
Willem Grooters in the Netherlands occasionally emails me his thoughts on the current S&P 500 relative to the Dow Crash of 1929. Mr. Grooters draws a line between the 1929 high and the 1932 bottom, noting the coincidental oscillation of today's bear around this line. His analysis of trailing 12-month earnings suggests that this pattern may continue — that the current correction could well take us back below the line.
