1929 Crash Fractal in the DJIA ?
In one of my previous posts I was trying to see if we would get a 1987 plunge in the markets. This did not happen, but we did get a fairly standard decline and market correction.
The question now is, will the mini bear down move be over and off to new highs? Or do we have something much more sinister in store for us as far as the DJIA.
Google gets some blowout earnings and the mood seems to be improving on the recent snap back rally.
But now we are faced with a key question as far as the DJIA goes. The DJIA will soon hit the bear down trend line.
Not only that but the decline in the DJIA in terms of form, looks similar to the form of the beginning of the 1929 style CRASH. The time symmetry is lacking, but here is what is similar:
A. The 1929 final rally was a fib .618 retracement that got STOPPED right under the bear down trend line, then after that was the 45% plunge
B. The number on the current DJIA pricing for a .618 retracement is 35,500. WATCH that number very closely in the DJIA to see how it reacts to it and does it get STOPPED there.
During the fierce rallies in the market it always seems like the bear scenarios die quickly. And that may actually be the case. In fact the market could bust up through the downtrendline sometime next week and blast higher. So the key will be to watch the price action very carefully for STALLING.
If I see enough stalling then I may go heavily short at what may be a critical FINAL high in the market.
The backdrop is still murky. We have rates rising. The TLT bond etf looks like it will soon CRASH down which means rates crash UP. The size of the bond market is orders of magnitude larger than the stock market. And if I recall correctly what really tanked the USA in 1929 was that the bond market collapsed and that took the stock market down with it.
The MARCH 14th,15th this year is a very important date for a couple reasons.
First it is the next fed meeting and the one where rates are supposed to go up. It is also a key cycle date from a man named Armstrong. So both from a rate inflection point date (fed meeting) and a cycle point, it is a forward looking event and we have to wonder if it could be a magnet date to go down into.
Obviously it will not be a date for the market to go down into if we see the market break north above the down trend line.
Note also the position of RSI and MACD.
RSI is near 50 zone. In 1929 the market got STOPPED at the 50 zone before the 45% plunge.
We are at 50 now, so it would seem that level should hold the market if it is to remain bearish.
The MACD in the current DJIA is about to cross upside bullish. That same situation occurred in 1929 but AT PRECISELY OF WITHIN A FEW DAYS OF THE FINAL PEAKING IN PRICE BEFORE A 45% CRASH.
So my point is we could right now be very close to a peaking point in the DJIA. INTRADAY of course you can see big up and down. But it is the CLOSING Price that matters the most over the next 5 days.
Will this scenario fail like most of the crash scenarios do? or will it be different this time ???
One final note... the drums of war seem to be beating louder.... that is a potential black swan that could rapidly change market sentiment, possibly severely.
The question now is, will the mini bear down move be over and off to new highs? Or do we have something much more sinister in store for us as far as the DJIA.
Google gets some blowout earnings and the mood seems to be improving on the recent snap back rally.
But now we are faced with a key question as far as the DJIA goes. The DJIA will soon hit the bear down trend line.
Not only that but the decline in the DJIA in terms of form, looks similar to the form of the beginning of the 1929 style CRASH. The time symmetry is lacking, but here is what is similar:
A. The 1929 final rally was a fib .618 retracement that got STOPPED right under the bear down trend line, then after that was the 45% plunge
B. The number on the current DJIA pricing for a .618 retracement is 35,500. WATCH that number very closely in the DJIA to see how it reacts to it and does it get STOPPED there.
During the fierce rallies in the market it always seems like the bear scenarios die quickly. And that may actually be the case. In fact the market could bust up through the downtrendline sometime next week and blast higher. So the key will be to watch the price action very carefully for STALLING.
If I see enough stalling then I may go heavily short at what may be a critical FINAL high in the market.
The backdrop is still murky. We have rates rising. The TLT bond etf looks like it will soon CRASH down which means rates crash UP. The size of the bond market is orders of magnitude larger than the stock market. And if I recall correctly what really tanked the USA in 1929 was that the bond market collapsed and that took the stock market down with it.
The MARCH 14th,15th this year is a very important date for a couple reasons.
First it is the next fed meeting and the one where rates are supposed to go up. It is also a key cycle date from a man named Armstrong. So both from a rate inflection point date (fed meeting) and a cycle point, it is a forward looking event and we have to wonder if it could be a magnet date to go down into.
Obviously it will not be a date for the market to go down into if we see the market break north above the down trend line.
Note also the position of RSI and MACD.
RSI is near 50 zone. In 1929 the market got STOPPED at the 50 zone before the 45% plunge.
We are at 50 now, so it would seem that level should hold the market if it is to remain bearish.
The MACD in the current DJIA is about to cross upside bullish. That same situation occurred in 1929 but AT PRECISELY OF WITHIN A FEW DAYS OF THE FINAL PEAKING IN PRICE BEFORE A 45% CRASH.
So my point is we could right now be very close to a peaking point in the DJIA. INTRADAY of course you can see big up and down. But it is the CLOSING Price that matters the most over the next 5 days.
Will this scenario fail like most of the crash scenarios do? or will it be different this time ???
One final note... the drums of war seem to be beating louder.... that is a potential black swan that could rapidly change market sentiment, possibly severely.
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