Tuttle Asset Management is pleased to announce an update to our industry-recognized 100-Year Dow Chart & Technical Study, which includes the 2008 bludgeoning. Armed with the benefit of hindsight, we can now confidently look back and evaluate what sort of roadmap our analysis provided.

• All previous initial breaks above the secular consolidation channels of past have failed
• All of these initial attempts / breaks have crossed above the channel within 7 to 10 years
• All the past failed attempts have surpassed the secular channel top by as much as 19% (2007’s reached 20% or DJIA 14,195)
• And last but not least: All initial attempts and failures have resulted in devastating downturns.

2008 will be considered one of the worst economic periods in a century; the fall-out caused one of the greatest destructions of wealth in American history. This devastation calls to mind the key premise of my firm's original 100-Year Market Theory accompanying the Dow Chart, which stated:

"Excess market valuations, due to extreme price movement upward over extended periods, may take years to work off as earnings catch up with prices."

October 2008 became the first instance, outside of a brief moment in February and March of 2003, where the S&P 500’s 10-year P/E crossed back below our overvalued 22 level. You will also notice 2008’s push (and subsequent bounce) against the bottom of the channel. In light of this, many have asked if this indicates an “all-clear” sign. In my 2008 year-end report, I emphasized how a break below the secular channel (2003 lows) is likely. If prices remain below that channel, it increases the probability for the second secular bear market in history - or what I call “The Abyss.”

This is possible for 2 reasons: First, not unlike the initial cross above the secular consolidation channel, the subsequent attempt at a bottom has always gone lower than the initial. Second, the bottom has not occurred without the P/E multiple dropping below my notorious undervalued 10 level.