Barclays Capital technical strategist say the parallels between the
2007 Dow Jones Industrial Average high to the present and the 1906-1907
period are "striking," with market swings "in both percentage and form"
nearly identical. They are bullish on stocks in the near-term after the
DJIA appeared to bottom last week. The strategists stress however that
the monthly close will be critical. "A close at current levels or
better would leave a similar monthly candle to the one seen in November
1907, indicating that the analogy is holding strong," they say. The
most bullish scenario would be that last week's low (7882.51 Oct 10)
represents the low of a multi-year range trade that precedes a secular
trend. "In this ideal trajectory, there are likely to be many cyclical
bull and bear trends," the strategists say.