Some market dips are psychological and those factors don’t matter but this one is clearly driven by the fundamental lack of spending power of the population.
the disparity of income is what allow ed those who predicted this collapse to predict it.
The disparity matches or is worse than 1929.
However there is another factor tha tis worse than 1929 and that is that much of the population not only has little wealth – they actually have NEGATIVE wealth becuase of the loose debt – so their hole to recover from to return to a spending consumer is larger unless debt forgiveness becomes government policy.

One can calculate what the dow should be base don estimates of sale the companies could have based on the spendable income of the current consumer’s actual monthly spending power and then applying reasonable PE ratios to those estimated corporate sale and combining them for a DOW. (I won’t tell you what me numbers say their becuase I sell that info for big money.)

however it is safe to say that their are few consumers in the USA with ANY spendable money now (most or in debt holes) and so they will only spend for essentials which now only include food, water, temperature control – significantly housing mortgages are dropped from that list – that’s how low the monthly consumer spendable income is.

In a nutshell though the bottom is that number.

That market bottom number changes if debt forgiveness is announced as public policy (which it has to be becuase most debts aren’t even being serviced so without forgiveness the consumer NEVER gets back to spending in the economy.)

the only other thing besides debt forgiveness that instantly change the market bottom number overnight are increases in the minimum wage which instantly increases consumer spending the month it goes into effect.

Lastly (but not in importance or effect) government spending increases the market bottom however you must apply a higher PE ratio to companies sales based on government spending becuase if the consumer wealth problem isn’t solved the government spending isn’t sustainable for more than a few years therefore you can’t value the stock permanently based on that short term increase in sales from government spending. (there is one exception to that – if the government increases it’s taxes on those who can pay now then government CAN sustain that spending.)

Fundamentally the same. Governmentally the same. Analogically the same. The chart swings are even similar.

Only thing that is different is that this collapse is globally synchronized; more along the lines of the 1930’s.

But Dr. Wish! You are a professor, a student of science. May I criticize and say, you don’t have enough data points (3 cases) to come to a statistically reasonable conclusion. Even adding Japan 1990’s, and 2000-2003 bear market, we still have only a handful. Add all the minor bear markets, and we still have a random roll of the dice.

Isn’t it enough just to take it day by day, and wait for the GMI and other market risk indicators to show us the light?

Eric, first of all I love the blog and the principles of your style. Absolutely one has to be patient in the decline. But in this case I think the comparison is proved to be unhelpful. I’m surprised it seems to lead you to be dismisssive of T2108 which seems to have a better record of tracking swings.

‘On last Friday’s site I brought up the matter of the 50% Principle. When Dow 7470 was violated, the 50% Principle turned bearish, which is another fact which is both discouraging and hard to swallow. With the 50% Principle, the Dow is now technically able to test the low from which the huge bull market of 1982 to 2007 began — that low was 776.’