While the market never completely repeats itself, there are major similarities between past severe market dislocations and the current one. The past severe market dislocation was refering to 1937 Great Depression.
The table below outlines the major similarities between the two, comparing the Dow Jones Industrial Average for the 1937-1939 period to the SPDR S&P 500 exchange-traded fund (ETF), for the 2008-2010 period.
| 1937-1939 | 2008-2010 | |
|---|---|---|
| Major Bear Market | March 1937-March 1938: Dow -47% | Oct. 2007-March 2009: SPY -57% |
| Liquidity Rally | March 1938-Nov. 1939: Dow +58% | March 2009 – April 2010: SPY +82% |
| Initial Decline | Jan. 1939-April 1939: Dow -22% | April 2010 – ???: SPY -13% so far |
| Nov. 1939 highs not exceeded until 1945 | April 2010 highs not exceeded until? |
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