Photo: ucffool via Flickr
The image of the stock indexes falling is still vivid in minds, as decades of growth evaporated in only few weeks.With the economy only timidly recovering from the ashes, a question is still unanswered:”Will it happen again?” Only time will tell.
However, it appears clear the long-lasting trends of the 90′ are over. The stock indexes are oscillating within boundaries. A top might be nearing, if history repeats itself. Let us see why.
Over the last 100 years, the Dow Jones Industrial has topped roughly every 35 years followed by long period of consolidations that lasted for 14/17 years. Within these lateral movements, top where hit every 3/4 years, while bottom reached every 3/5 years.
Movement extended roughly 50% from bottom to top and from top to bottom. Bottom to top moves lasted instead for about 2/3 years, while top to bottom for 1-3 years.
How it applies to the current economic scenario? Well, the DJI topped in 2000 and 2007. It bottomed in 2002 and 2009. The max/min of these boundaries is 14000/700. The last uptrend started at around 700 and is currently at 1300. As a result, time and space are beginning to converge in this hypothetical consolidation model approach.
Written by ProfitsOn.com
The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed, neither the information presented nor any opinion expressed constitute a solicitation of the purchase or sale of any forex, futures or commodity product. Those individuals acting on this information are responsible for their own actions. Forex, futures and commodity trading my not be suitable for all recipients of this report. The risk of loss in trading forex, futures and options can be substantial. Each investor must consider whether this is a suitable investment. All recommendations are subject to change. Please Note: All performance figures and illustrations were obtained using historical back testing on a computer and are not the results of an actual account. No guarantee is inferred that future performance will be like the results shown. Futures, forex and options trading involve risk. There is a risk of loss in futures, forex and options trading.ge at any time. Past performance is not a guarantee of future results.