1998 - Blow Off to a'29 Style Crash?
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Found on the POGF thread; thanks to Mark Bartlett. Something to keep in mind.
John
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1998 - Blow Off to a'29 Style Crash?
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Disclaimer: This is an academic site.ÿ None of the following information should be used for personal investment decision.ÿ "A fool and his gold are soon parted."
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We are at a critical turning point over the next week or two. I believe there is a good chance the market will continue up through April, Zippergate notwithstanding. As the chart below shows, the market continues to run up in a fashion having an uncanny parallel to 1929. Look at the blue line for a moment. You'll see there is a gap. On the left is actual numbers. To the right of the gap is where the market will go if we blow off in the same manner as '29-30. This blow off (history repeating closely) would be a 24% run up from the 7600 area we just revisited. That's the peak of the blue line. Dow 9500.
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Predictions: (OK, sure, what the hell...)
If we replay the curves of 1920-1934 closely, the target levels are: Peak in mid April, Low around 5718 week ending June 3. Recovery to 7351 week ending 11/16/98, closing the year at 6450. 1999's first week would close at 6054, and inspite of a few rally attempts, the relentless whipping of the early '30's would be replayed. One more point: If we are replaying closely at the end of June, and we've had a massive run up and crash, then the implication is that the Year 2000 roll over will be ugly enough to have a negative impact on folks. Triggers to watch in April: SEC publication of Y2K impacts by major companies, Fed action to raise, not lower interest rates, in reaction to the 9% annual rise in aggregate money supplies, such as M3 and broader measures, and last, but not least, about then Ken Starr may actually do something. As the old Chinese curse goes, "May you live in interesting times...".
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