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Market’s May Lows Could Be Retested in June

When we discussed the similarities of 2022 to previous years a little over four weeks ago, we scrapped the 1960 comparison and added in 1962 and 1974. In the updated chart the market appears to have avoided the May-1970-type low and shifting over to a trend that tracks the 1962 pattern closer. Both 1962 and 1970 experienced sharp late-May/early-June rallies. The market never looked back in 1970, but in 1962 the market hit its low toward the end of June with a significant retest in October.

The 1974 comparison is still a possibility, but it’s a longshot for us as 1974 was at the end of a long, nearly 2-year bear market on the heels of the Arab Oil Embargo and the U.S. exit from the Vietnam War. One could extrapolate some geopolitical comparisons of 2022 to 1974, but if anything, 2022 is at a much earlier stage.

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