History doesn’t repeat itself, but it does rhyme.
Tim Knight of The Slope of Hope put up an excellent post yesterday covering the bear market rallies of the 2000-2002 bear market. Again and again, powerful rallies were interpreted as marking the end of the bear. And again and again they turned out to be wrong.
The charts in the post are priceless.
I also read the WSJ article “Stock Investors Start To Believe That The Worst May Be Over” (subscription required – anybody who wants to read this blast from the past, which I highly recommend, e-mail me for a link; ES Browning, June 5, 2001) he links to. Note the comparisons between that article and the one in last Monday’s WSJ that I wrote about (“Excellent WSJ Article On The Sentiment Shift”, Top Gun FP, April 28).