The current DJIA has been tracking fairly closely with the market from 100 years ago. In 1912 the DJIA peaked on Oct 8th, had a minor leg down, and then made a secondary peak on Nov 29th before a more substantial sell-off began. I don't know if it will continue to track with 1912, but it's worth keeping an eye on this possible analog.
The chart below shows the Oct 2007 top. The secondary peak in December of 2007 retraced .707 of the initial down leg. Our current market could easily do a .707 or .786 retracement of the initial leg down without invalidating the idea that Sep/Oct 2012 was a major top. If the retracement goes much beyond .786, it would call into question whether the market has topped.
Kim Rice 11/29/12
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