Rarely has the stock market seen a six-month rally like the one it just turned in. The Dow Jones Industrial Average’s 46% surge was one of just six of that magnitude in the last 100 years. And that is exactly what worries many analysts.All previous rallies of this magnitude took place in the 1930s and the 1970s, according to Ned Davis Research. Those were periods of turbulence for both the economy and the markets, and none of the gains was sustained.Many analysts believe that stocks are again in such a turbulent period, and that this rally could lead to another slump…The current period is similar to the 1970s and the 1930s in the sense that the rally of the past six months came after an even bigger decline. That doesn’t mean the future has to play out like the 1930s or the 1970s.
By E.S. Browning, Sept. 21, 2009, WSJ