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Strategies & Market Trends : The Options Box
QQQ 608.86+0.1%Nov 14 4:00 PM EST
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To: Poet who wrote (9844)3/4/2001 6:28:51 PM
From: hobo  Read Replies (2) of 10876
 
In reading Hahn's weekend update looking at the comparison charts that he pointed out (i.e. the 1929 and 1987 crashes), I noticed the following:

The absolute % fall in 1929 of the Dow from its high of 380 (Sept-1929) to its low of a little less than 200 (Nov- 1929)
was about 48 %.

Looking at the Dow in Oct 1987, the % fall was from approx. 2725 (August 1987) to its low of aprox 1725 (Oct-1987) or about 37%

Edit:

I have to point out that the final bottom in the 1929 crash was reached in 1932 at less than 48 ..... (about 87 %)

That would make the NASDAQ about.... hmmm less than 700.

so... There could be SUBSTANTIAL room for a further fall... that is... assuming the same mistakes are made as in that time... further... the question is : are we in that bad of a shape for such a large declline from here ?

Then if we look at the NASDAQ (COMPQ) high last year of 5048 (March-2000) to its recent low of 2117 (Feb 2001). This fall represents 58%

This decline, in percentage basis, has been a larger decline than both, the 1929 and 1987 crashes, and taken longer from top to bottom.

The question from this point on are:

1. Are the fundamentals of the economy worse than in those two prior times?

2. Is the market psychology worse than in those two prior crashes ?

3. Does the Federal Reserve have better tools to counter a free fall from these levels? --here I am not expressing an opinion on the wisdom of such move, however, I doubt they would stand aside in case of further lower levels.--

4. How are the fundamentals of the market to perform from this point on ? This from the perspective that it seems the consumer seems to be in an ok shape, (as opposed to the manufacturing sector that seems to be in a recession already.

I do not have answers for any of the above... If anyone here have ideas I will gladly listen.
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