Similarities of this market to 1973-75 ( good news there)

Veteran analyst Dick Arms has a very encouraging post on Barry Ritholtzs blog ( I have a link to that blog on the right of my blog ), click here to read it.
He argues that just like we fell from October 07 highs to Lows in Oct08 and then rallied and fell back in Jan, similar stuff happened in 73-75.
So what happened after 75 Jan? Read his blog, Dow rallied 40% that year.
I think one has to look at all the angles while trading/investing. It surely can rally.

Let me try to explain my logic here. This morning I was watching CNBC and they had the CEO of Saks and two other veterans.
What they said was very interesting. They said most people were blaming the retailers for putting up sales too early. But they said they order merchandise/inventory 12 months or so before, so they did this in 07 and then the slow down/ recession started and then the economy /consumer came to a standstill in Sep 08. So they had this double whammy and a huge supply and no demand.
They had to clear the inventory by putting everything on sale. But now they are trying to get the supply in line with the demand so by summer they expect it to be in line.
This might mean ordering less, ordering what consumers want, cheap stuff maybe.
They expect demand to be very bad for the next 2-3 quarters at least.
But the demand and supply is expected to come in line.
So as they lower forecast its going to be easier and easier to beat that lowered earnings forecast with each quarter. Expectations are very low and any upside is going to send the stocks higher.
The only problem is if the demand keeps falling and present supply is still too high.

My point is everyone is adjusting to this recession. Earnings estimates are being slashed and some quarter its going to be low enough for the companies to beat it.
Is that time now or is it still far off? Thats the question most are trying to find out.

Reading the opinions of many analysts/traders/investors who have been right before and some not, this whole thing might take years and years to play out and in between we came get sharp rallies. So a 40% up year is quite a possibility .
But remember it not a new bull market even then, what about the years after that, the consolidation and churning is expected to continue.
Many expect this bear to play out in 3-5 years and some think it might take even longer.

That is why I keep saying be a trader and not a investor. Protect that capital.
There will be a better investing envoirnment and you will know it when you see it. These rallies which are bear market rallies just get people over-excited and pull them in just so that the big guys can sell to the small guys and get out. This is what i think and my opinion. While the economy remains bad, stocks can rally but does not mean everything is fixed.
Understand that the markets and the economy are two different things and do not go hand in hand. There are many money making opportunities , but its not going to be what it was , not those sectors/stocks and not those strategies.
New leaders will emerge and new sectors will fly. I will try my best to keep you updated, but for now I do not thing buy and hold forever is going to work .