Here's a chart that you don't want to miss
I personally am not a big fan of technical analysis. While I don't pretend to understand it, it all seems like a whole lot of mumbo jumbo to me. Having said this The Big Picture featured an amazing chart courtesy of JPMorgan this afternoon.
Check this out. The Dow Jones Industrial Average recently retraced to its 12-year low. This has only happened two other times in its history. One was on April 8, 1932 and the other was on December 6, 1974. Does this mean that we are close to a bottom? It's tough to say. I'm more of a believer that every single period of time is a product of independent events and that it does not matter what has happened in the past. I personally would be shocked if this was the absolute bottom for the major indices given what is going on with the economy right now, housing, jobs, and consumer spending are all in a freefall and the banks are a mess.
Still, this is one interesting chart. In both of the previous times that a 12-year retracement has happened the economy continued to get worse, i.e. unemployment continued to rise and U.S. GDP continued to fall, after the ultimate bottom in the DJIA was reached.
I would not be surprised in the least if we put together some sort of nice, sustained rally in the near future here. Heck, enough people are looking for one. Still, I personally am going to treat any positive action as nothing more than a bear market rally. I will continue my quest for yield and stick with the bonds that have been treating my portfolio well.