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Dow Headed For 35% Correction March-April 2011?

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Here is an interesting chart that compares some historical Dow Jones Industrial Average market data from the 1938 crash to our current DIJA market. It looks the Dow is ready to take a dive off of a cliff. The current Dow has pretty much already retraced the historical 1938-1940 data. By my estimates, we should be heading for a 35% market correction somewhere between now and April 2011. Be careful out there, things could a bit rocky…

I realize that past market behavior does not necessarily predict what the future holds. However, there have been plenty of cases where history does repeat itself. I have considered shorting the Dow at this point, but am still hesitant because of the QE2 program currently in progress. I can definitely see a severe market crash happening in June 2011 (or shortly afterwards) when the current Q2E stops. Until then, I am a bit doubtful we will see a 35% correction unless the Japan nuclear situation gets worse.

What are your thoughts on this? Do you think a severe Dow crash is just around the corner? Is now a good time to short the Dow?

 

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