Stock prices are a neat reflection of public sentiment. In the rise of business there is exuberance, in the fall there is despair.

Public confidence, spending, and investment are high as the market goes up. When the market turns down, pessimism and conservative spending and investment take place. The graph below depicts the Dow Jones Industrial Average monthly low in February 2003, which followed a boom market high in December 2000. The last economic “good time” peak was October 2007.

This high slid to an assumed March 2009 low of which we are still recovering. Notice the long “bracket” or sideways movement of the market from 2004 through 2006; this is the recovery period. The market, and human optimism, then soared in 2007 breaking 12,000. A similar bracket movement is forming now that may last quit a long time before the next major market high.

The graphical data on precipitation (another indicator of economic conditions) is pointing to economic growth. So it is likely that March 2009 will be the low point in this Great Recession.