I am sure you have seen a chart of the Dow Jones Industrial Average since 1900 thinking that the market is in a similar time as 1929, and that the final lows are not in yet for the major indices. (In case you haven't seen any long term historical charts of the major indices, try going to StocksCharts * com website and look for the link "Historical Charts" on the right side of the webpage) While that is possible, it would seem more likely that the next few years or more will be similar to the 1066-1082 time frame due to lack of sufficient natural resources of all sorts, and limited capacity to lend by financial institutions. We have already seen a major downsizing of the major corporations of the world in preparation for an extended period of slow growth. So, until they start to make preparations to expand back to the levels they were at in 2007, then I think it is reasonable to expect an extended range bound market for the foreseeable future.
Also, many will be pointing out a massive H&S top forming in the $INDU when it returns back to 11,000 in 2011 while at the same time others will be calling for a rebound back to 14,000. So where will all the sideline money find a home for the short term? I expect more will flow into the large caps again, mainly the Dow and the larger ones in the S&P, the S&P 100.