2011 Stock Market Performing Like 1973 Again
Elliott Wave Theorist’s Bob Prechter is comparing the 1973 stock market to the 2011 stock market — calling the situation very like that of 1973 — the stock market has been in a two-year bear market rally, per our interpretation of the Elliott Wave model.
In 1973, the stock market topped in January and was weak into August — then it rallied hard right through September and October, statistically the two most bearish months of the year. It was a convincing rally and optimism returned. That rally ended on October 31, leaving the typical “Bear Market Months” in the dust — but instead of continuing higher, the market turned lower, and in just a month plunged below its August low. November is usually a favorable month, but that year it wasn’t.
Given the horrible developments in Europe and the chaos we are likely to see in the next few weeks as details emerge from the “Super Committee” — we could see a 50% or 61.8% retracement off the October rally, which would be another 4%-6% drop from here.
Tags: 1973 Stock Market, 2011 Stock Market, Bear Market Months, Bear Market Rally, Bob Prechter, Elliott Wave, Elliott Wave Model, Europe, Favorable Month, Market Top, October Rally, Retracement, Super Committee