lehman anniversary tuesday, page-12

There are some interesting correlations between '38 and now. Here is a big one worth mentioning....

***1938***

At 180 days the DJIA dropped down into a low of 127.88 points.

The next day was up, and the day after that was a marginal new low at 127.85 (forming a higher double bottom or "tweezer" bottom would you believe?).

5/8th of the rally was 127.99. Not bad.

From there, the index took off and was at new highs in a week or so.

The high for the rally was 158.39.

A 1/4 extension of the rally to the prior major high on 25 July (the range was 97.46 up to 146.31) worked out at 158.52. Not bad again.

It took 44 days from the 180 mark to get to the high.

***2009***

We had a low at 180 days on 2 September.

From the 180 day low, we have put in a not too dissimilar rally as well.

44 days from 2 September is 16 October, which is actually a Friday, not a Sunday (which was what I posted yesterday, and that was my 4th attempt to get that one right. You wouldn't hire me to break bricks!)

Trying to match up a similar 1/4 extension is difficult as the high in '38 was around 120 days and we had a low around the same time.

However:

- 1/4 extension of the rally to 11 June is 1028 which is now history.

- 1/4 extension of the rally to 7 August gives 1106 which could be a target although perhaps that should be slightly discounted because of where 7 August high is at in the rally as against the ’38 high.

Now I've taken such a good look at this one, last night will probably turn out to be the high ha ha.