We wanted to start the new blog site with a chart on the Dow Jones since 1900 to 2009 (present day) to show that nothing has really moved since we last produced our market chart. This is good news and bad news. The good is that no down side break-out occurred over the past few months, in other words, we are not sitting at Dow 4000. The bad news is that no break-out at all occurred, we are still testing lows in the 8000 range and waiting for the Obama administration to get its stimulus package completed in Congress. Lack of a package could drive the market lower.
Update ( Feb 23, 2009): Our latest Dow chart is our Update from February 20 (please click on the link). The post includes a 1900-2009 Dow chart and a 1997-2009 chart. You can see all of our latest chart posts including the Dow, Dow performance for President Obama, Dow history, oil and gold at globalfinance.net/category/charts/.
Logarithmic Dow chart 1900-2009
We updated our Dow chart to show the 1900-2009 time line. You can view the chart here (click on the chart to view the full-size image):
The log chart shows the change in the Dow over time in percentage terms. You can find out more about log charts on The Motley Fool’s FAQ which explains the difference in non-technical terms. What we can take away from the current chart is that if we buy the story that today’s crisis is like the Great Depression, then the market still has a long way to go. On the other hand, if things stabilize then the worst may be over.
To get some perspective, let’s look at some other time periods below the jump…
Perspective from other times
Two other periods are worth looking at for some guidance. One is the 1999-2009 period which covers the tech bubble bust (though this did not have much impact on the Dow), 9/11 and the current crisis. An arithmetic chart helps illustrate that we have, indeed, traversed a bubble and are now in a period of stagnation:
The next chart worth looking at is one from 1928-1948. This covers the 1929 crash, the 1930s Depression, World War II and first years of post-war recovery:
Here we see where we may be headed once the market bottoms out. In other words, get ready for a long period of stagnation. The big question is, where is the bottom?
. . . And that’s how it goes