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The same thing happened in the summer of 2000 when the Dow and S&P were on their way down and several other averages like the New York Stock Exchange Composite were about to join in (they did so in September 2000). The NYSE Composite recovered and carried to all-time highs but not without generating an even more astounding cultural penchant for clogging the roads with a vehicle that is the perfect accessory to second wave rally in a major bear market (March 2003- May 2006?). The H1 is a five-ton, military style truck that blends the anxiety and apprehension of the bear market with an overwhelming bull market desire for ostentantious display (an H1 costs $130,000 to $140,000). The end of the rage for Hummers is an even more urgent signal than the anti-SUV sentiments of 2000. Meanwhile, small cars are growin in popularity. A recent issue of the Wall Street Journal points out, there’s a growing interest in shrinking cars: “Auto makers increasingly are introducing cars of decreasing size.” The trend suggests an even stronger “turn away from the image of prosperity” than the one that EWFF identified at the peak in 2000. For EWFF's full analysis of the July 2000 precedent, see Additional References.

July 2000, EWFF
Be Careful What You Ask For
In recent months, one of the most powerful changes in psychology has been a turn away from the image of prosperity. As Bob notes in Prechter’s Perspective, 1967-1970 marked years in which the VW became the car of fashionable choice.

Tastes in autos are ratcheting down. “With Today’s cars, It’s Hip To Be Small,” says USA Today. The reversal actually started in May 1998, one month after the peak in the advance/decline line, with the advent of the new VW Beetle, an updated version of the same car that Prechter’s Perspective identified as the turning point for car fashion in 1968. . Discounting has become rampant in the market for supersized “sport utility vehicles,” and a rising chorus of protest against SUVs is gathering steam. The chairman of Ford, William Clay Ford, even joined the ranks by bashing his own company’s line of super-sized autos at the firm’s recent shareholders meeting. The performance “baffled shareholders, stunned Wall Street, angered dealers and left observers wondering if the latest Mr. Ford is not a proud tycoon like those who preceded him.”