US stocks today versus 1938

 EmailPrint This Post Print This Post

As investors debate the longevity of the nascent stock market advance, they are increasingly falling back on similar historical situations to glean perspective. In this regard, a comparison of the current market and that of 1936 – 1938 makes for interesting reading.

Strikingly, the charts below, courtesy of Bespoke, show similar patterns in the movements of the S&P 500 Index from 2007 to 2009 to those of 1936 to 1938.

Given the similarity of the advances and declines in these periods, Bespoke looked at how the S&P 500 would have to perform going forward in order to keep the relationship intact.

At its peak on May 8, the S&P 500 had notched up gains of 38.2% from the March lows. In 1938, the S&P advanced 50.5% in the four months following its low.

Bespoke said: “If the S&P 500 were to have a similar rally off its lows today, it would top out at 1,018. While breaking 1,000 on the S&P 500 seems remarkable given where we were in March, it is still nearly 200 points lower than where the index was trading before the Lehman Brothers bankruptcy.” Time will tell …


Source: Bespoke, May 18, 2009.

Did you enjoy this post? If so, click here to subscribe to updates to Investment Postcards from Cape Town by e-mail.

OverSeas Radio Network

1 comment to US stocks today versus 1938

Leave a Reply

You can use these HTML tags

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>




Top 100 Financial Blogs

Recent Posts

Charts & Indexes

Gold Price (US$)

Don Coxe’s Weekly Webcast

Podcast – Dow Jones

One minute - every hour - weekdays
(requires Windows Media Player)
newsflashr network
National Debt Clock

Feed the Bull