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“We first took a look at this comparison back in August 2011 because of a common factor in each period: there was no divergence in the A-D Line. Most of the time when there is a price decline as big as we have just seen, the A-D Line gives us warning of liquidity problems by making a divergent lower high as prices make a higher high. We did not get that A-D Line signal in the summer of 2011, although other divergences did tell us (and thus our subscribers) that there was trouble brewing.1946 similarly did not have an A-D Line divergence, and so that made it worth taking a look at as a comparison model. When lining up the price patterns in a single chart, the correlation of price movements then and now became obvious.1946 also shares other similarities with the current time frame. The U.S. was in the midst of dismantling the stimulative effects of a war-time economy, and unemployment shot up in a big way. There were also concerns about rebuilding post-war Europe, and whether or not loans would be repaid like the Lend-Lease Program. Now we have an economy with high unemployment, and the expiration of stimulative efforts like TARP and QE1 & 2. There was great labor union unrest in 1946, which led to the 1947 passage of restrictions on union activity in the Taft-Hartley Act, which passed over President Truman’s veto. 2011 saw a big push back against unions in states like Wisconsin and New Jersey.” 1946 Analog Holds Key For Current Market