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Strategies & Market Trends : The Millennium Crash

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To: Rarebird who wrote (866)	9/19/1997 7:25:00 PM
From: Thomas C (Hijacked)	of 5676

I think a fundamental discussion point is whether or not 'crashes' are caused by some news or economic event or are simply caused by a major sudden phase change in the attitude of the psychological masses. Who in the world can definitively say what SPECIFICALLY caused the 1987 'crash' ? . And even if they can say something, why should we believe them? Everyone has an opinion about why it happened (which of course only occurs AFTER the 'crash' happens). Besides, 'crashes' usually happen when everything seems to be a pretty much rosy picture in the economy. By the way, todays market close again continues to precisely follow the pattern of the 1987 'crash'. The close in the DJIA was down about 6 points today which would complete the shelf of three days as compared to the 1987 shelf of just two days. I am simply astounded at the continuing similarities in the price movement of 1987 and 1997 since the all time highs. This is not merely a 'pipe dream'. This will be one of the greatest tests of history we have ever seen. History suggests (1929, 1987) that the Dow cannot break significantly through 8011 (which it failed to do again a couple days ago). History also suggests that the crash is not more than about 15 days away. If something does not start to seriously develop by then, then the historical precedent will have been broken. But I cannot believe that. The historical trend will be confirmed! I have been trying to think of analogies which relate to the 'mechanization of psychological behavior'. Because really that is what this is all about and why I so firmly believe in these similiar data patterns. I suppose one possible example is if someone where to do a statistical analysis of the number of days it takes for 1000 alcoholics to go back to the bottle after they quit cold turkey. My guess is that you would come up with a predictable number. And so the same predictable number of days seems to be playing out here in the markets. We shall see... Tom

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