Comparing Dow Bubbles Past and Present: 1933, 2009, and Today

Comparing Dow Bubbles Past and Present: 1933, 2009, and Today

The Dow index for the period January 1933 to May of 1938 is plotted in green in the nearby figure. From the low of March of 1933 the Dow rose by 500% to a high in March 1937.  About a year later the bubble burst and the Dow plunged to 50% of its peak value. 

During the period March 2003 to March 2009 the Dow index followed a path quite similar to the 1933-1938 pattern, and is shown in green in the figure. The Dow rose by over 200% to a peak in October 2007, and then plunged by more than 50% in March of 2009, executing the trip in a period of 6 years, just like in the 1930’s.

Since the low of March 2000 the Dow has again risen 200%, and this history is shown on the figure in red. Will the Dow history of plunging repeat for a third time? If so, then look for the next plunge in late fall of 2013.