The Dow now hovers just above the 8,000 level. With a long-term view in mind, an obvious question is whether the decline to date has taken us below the mean value of the index. If we plot a linear regression through the Dow since 1950, it appears that we've fallen sharply below the mean.
But time frame is everything.
If we chart the Dow since 1928, the current level appears to be a regression just slightly below the mean.
However, if we chart the Dow since 1900, the picture is less optimistic. Regression to the mean would require an additional decline to the vicinity of 5,500 to 6,000.
Note: Our Dow overview now includes a chart of 1924-1940 with a focus on the Crash of 1929. The current market decline has been more rapid than the typical bear, but it's nothing like the rate of decline that lead to the Great Depression.