The U. S. equities market is, right now, at the same crucial turning point that it was at in the week of April 18, 1930, when the retracement from the crash ended, and the long, two year bear market began.

In the first chart here, you see the Dow from 1929 – 1933 (the time labels on the horizontal axis have 50 years added to them due to an odd Y2K-related quirk in my software).  At The Crucial Turning Point, price touched the major resistance curve that was launched from the 1929 top, and rolled over, just as that TopFinder ended.

The second chart here is the Dow from 2007 up to yesterday.  The same comments hold – price is touching the major resistance curve, just as the TopFinder is ending.  If price turns down from here, we’re repeating the scenario of the 1930s.  If price breaks up through this resistance, then the massive liquidity that the Fed has pumped into the market will have put us on a different course from the 1930s.

Which way will it go?  I don’t know.  We should see the answer in the next few days!

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