The biggest "macro" disappointment I've had in the markets and my trading over the past six months is simple to explain, and I came across a chart this morning which does a nice job capturing it.

My expectation was that the markets, having rallied mightily from March to October, would crest at a major resistance level and simply roll over and resume their fall. So far, any falls have been nothing more than a tease.

There was a fall in late October; that got trounced by higher highs; there was a healthier fall in late January and early February; that was obliterated by dramatically higher highs. Yesterday's 200+ point dip might have been the beginning of simply another fake-out.

My expectations for the market were much closer to what NBG – a Greek bank, shown below – experienced. I guess the required fundamentals for my expectations had to be a lot worse than what we're seeing in the U.S.

After last night's video post, a thoughtful Sloper wrote me an email in response. It was so good, I asked his permission to publish it, which he kindly granted. Here it is:

Although I believe technical analysis is incredibly useful in helping investors interpret the myriad of factors in determining an asset's traded price, not least the intangibles of human emotion, I do feel that trying to draw analogs between vastly different periods in time and hoping for precise repetitions of patterns is at best only a (very) rough guide and at worse wholly misleading.

Although the current financial malaise does bear certain resemblances to the 1930's and the Nasdaq euphoria of the late 1990's and subsequent bust, there are so many differences.

• 1930's Great Depression: This was a period where globalisation was non-existent in its current sense. The world was characterised by large country blocs, where the US was still very inward looking and isolationist after its experiences of WWI. We can argue all day over the causes of the Great Depresssion and the pros/cons of the subsequent government intervention, but the key difference then was that the New Deal was aimed at specifically raising the living standards of the masses rather than the few in the current case.
• 2001-03 economic dip: Again, I do not feel this is comparable, as the mini-recession was an isolated affair both in terms of geography (mostly affecting the western economies) and industry (very much tech focused). Unprecedented easy monetary policy and the boom of the BRIC economies meant there was little contagion and the effects were relatively small on a global basis. Moreover, the tech story was very much real (look at some of the most successful companies now such as Facebook, Google, Apple – a lot of their ideas are very much re-hashes of older ones which had failed because they were so ahead of their time and the technology and/or market was not there), which meant that many Nasdaq companies eventually had the opportunity to realise their growth stories. This is not the case with the wider market now – are you really telling me that the consumer discretionary performance this year is justified, and the construction companies deserve their valuations?

Although we can look back at periods in time for guidance, no two periods are likely to ever play out the same (just look at the long-term chart of the DOW, how many exact replications of patterns do you actually see?). I think it is crucial that you marry sound charting skills with a fundamental basis.

And Tim, you say you have some friends who are actually buying into this sustainable recovery story, if that is the case, then please tell me how do they want to resolve the unprecedented levels of private and government debt, the massive wealth inequalities, overburdened and bloated public sector budgets, uninspiring population demographics – all in an environment so volatile, interconnected and interdependent that the failure of one bank almost brought the world to its knees?

How do they expect a sustainable recovery where all the major western banks are in no position to lend, despite the largest, most widespread and concerted fiscal stimulus packages ever? Look at the money supply metrics, look at how undercapitalised the banks are still (despite asset prices increasing significantly and over $1.7tr of equity injected directly into the institutions), look at how over-leveraged the consumer still remains. Add onto that the mounting geopolitical tensions, the fact that the BRIC economies are in no position to lead even themselves let alone the globe out of the stupor – and for me that amounts to nothing more than a very uninspiring outlook for the next few years.

Therefore, I totally agree with your big picture view, and I think it will broadly act out as you envisaged (i.e. we will go lower before going higher). But trying to pinpoint tops and bottoms is a mug's game – what we are going through is unprecedented, and therefore we should expect markets to behave that way as well.