Market psychology is one of the fundamentals that built this house and it will probably be a big player in it’s remodeling.

I don’t think we can overestimate the effects of the unforseeable on the market psychology. A real good oil scare or another WTC event here in the US could exacerbate any pre-existing prediliction for decline. I think it almost doesn’t matter what type of catastrophe; almost anything could act as the tipping point for a fragile market.

Excluding that… The swings of the trends seem to show the same rates of decrease on the way down as they’ve shown on the way up. I don’t think the downswing will start in earnest for another 6 months or so. Come October I think the data reported for the prior quarter’s performance is going to be the final straw. Then the declines will start to rack up in earnest and it’ll take 3+ years before they reach the historical trendline. It may not overcorrect as it has every other time in the past but I kinda doubt it.