Last week I illustrated how eerily
close 2022 is tracking 1970. This disturbing comparison is not abating. Two
other comparable bear market years have also come to light. 1962 and 1974: both
midterm years with similar chart patterns.
1962 had the Cold War machinations and the Cuban Missile Crisis,
but rates, inflation and oil prices were nothing like 2022. 1974 on the other
hand had it all. Q1 GDP was negative, inflation surged, Oil Crisis and war in
1960 was removed since it held the March low until September
and was an election year. We also looked at 1969 and 1994 which have some similarities
and have been bandied about over the transom. But 1969 was not down in April
and flat the first four months. Though 1994 was a midterm year it was flat not
down like 2022 with a low in March.
We still expect a classic midterm bottom over the next
several months. Where it bottoms is anyone’s guess. We have ours. But we are reminded
of an old sign we used to have in the office about picking downside targets. It
said one thing, don’t do it.