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Pastimes : Clown-Free Zone... sorry, no clowns allowed
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To: AllansAlias who wrote (82016)3/18/2001 2:37:09 AM
From: Perspective  Read Replies (1) of 436258
 
Allan,

Have you spent much time comparing the '29 Dow to our present Naz? The similarities are eerie. Unbelievably spooky. I think I mentioned a couple of months ago that our move to new lows after the surprise rate cut was a stunning departure from the Nikkei experience, which began to tilt the odds in favor of something worse than Japan 1990-2. Our Nasdaq's rate of descent is higher than either Nikkei or Dow 1929.

The most intriguing thing for a chart hugger like myself is the corrective wave structure. There was the lone four-month upward "B" at the end of 1929 followed by a pause at the original 1929 low, which we acted out on almost the exact same timeframe. Following the break of the 1929 low, there were only four rallies of any substance, none of which lasted more than about six weeks, and none of which ever seriously challenged the prior low from beneath.

If you lock January 1931 to January 2001, you see the first of the four rallies in sync, but our timeframe is clearly compressed by about 1/3.

Other items of interest: we appear to have broken the lower line of the declining channel earlier than the Dow 1929; it took until late 1931 for the break to happen back then.

Man, was that slide ever *brutal*. The best one could do was go short and stay short. Lighten up a little whenever one of the three-month downleg resistance lines was broken to the upside, but look to set the position again into strength.

It wasn't time to really go bigtime long until the 1929-33 downtrend line was broken, although a trader applying reasonable stops would have avoided most of the shelling due to the late 1932 bounce.

I may come to regret this decision, but I think I'm going to read off the 1929 play sheet going forward, and let the market prove otherwise.

Thanks for the great charts - you're a tremendous help!

BC
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