Dow at 11008.17 and Comeau's predictions. : LUSENET : TimeBomb 2000 (Y2000) : One Thread

The Dow fell 243.54 points today, and briefly dipped below the 11000 level before rebounding. To repeat some of his key predictions, he expects a market drop of 5500 to 6000 points over the next two months. This is based on the advance of the Dow from the 1932 Depression low of 43 to his target top of 11569, divided by two. (11569 less 43, then divide by 2).

To give some idea of what a crash would look like, an article by Christoper Carolan called "Autumn Panics: A Calendar Phenomenon" is instructive. In this article he gives a historical overview of actual historial stock market crashes (Dow 1929, 1987, and Hang Seng 1997). What is revelent to this posting is the similarity of the price action structure. What that really means is that investors tend to react the same way in a panic and reveals their psychological twists from greed mode to all out fear.

In my crude dot diagram below, A represents the all time high in stocks prices. B is a failed attempt to exceed the previous top. C is the crash, typically about 20% from the high (1987 was 23%). D is a wild up and down period as the market oscillates attempting to find a new equilibrium, and this when intervention can be expected by the FED and PPT. D represents a upward bounce, typically a Fibonnacci number (.382 or .618 of the decline). E is the second downward wave, which might dip below the previous crash low. F is a chart pattern called a rising wedge, because the stock prices are slowly but steadily rising. At this critical point, if a depression is to unfold, the stock market will resume its slide. In 1987, the market reached this point but then rallied, largely due the Fed's unlimited supply of credit to the banking system. A ... . . B . . . . . .. . . . . . D . .. . . . F . . . . . . . . . . . . . . . . . . . . . . . . . . C E . . G

What I think is the KEY question is: will the FED be able to repeat its sucessful market maneuvers of 1987? If oil turns out to be the needle that punctures the internet mania balloon, then we are in real trouble. The FED cannot create it out of thin air like our credit/debt system. Inceased oil prices are very deflationary, and the basis of our economy.

The next two months might well show a 20% decline in the Dow, as the first major leg down with deflationary effects due within six months. If a panic develops, bank runs could follow.

Naturally, all of the above is just my opinion and I could well be completely wrong. But the crash wave structure has been well studied, and while it's a rare occurence, it's also a damming one. Be careful.

-- Sure M. Hopeful (, January 24, 2000


Bummer, all my work on making a dot chart got squashed!!!

-- Sure M. Hopeful (, January 24, 2000.

-- Sure M. Hopeful, does Christopher Carolan still work with Bob Prechter??


-- Ray (, January 24, 2000.

Mr. Hopeful- I used to be hopeful too. Thought a crash might end the fiat money system for good. Thought a crash might bring the USA to its senses, wake folks up to the debt problems, put a stop to the FDIC encouraging stupid risky loans. Still think the sooner it happens the better, no matter how awful. The longer we wait, the greater the pain. But I wonder lately....maybe it will just bring in global control, social breakdown, no end to the FED. So why are you so hopeful? Just wondering.....

-- goldilocks (, January 24, 2000.

Might try the <PRE&gr command to bracket the graph.
This will preserve your carefully placed white spaces.

-- Possible Impact (, January 24, 2000.

Ahh, HTML is such a cruel taskmaster, no mistakes allowed.
<PRE> is what I wanted to say.

-- Possible Impact (, January 24, 2000.

As I have stated before, I am not hopeful that the market will crash. If it does, then that will be the start of hard times.

I mean hopeful in the sense of "hope for the best" life is wonderful but all too short. Even during the Great Depression, with all of its suffering, some found a way to be happy, if not well off.

There is nothing that you or I can do to change the course of history, the Chinese Taoist's have an expression "Wu Sei", we will see. Let's hope for the best.

-- Sure M. Hopeful (, January 24, 2000.


Thanks for the work,your description was so clear I didn't need a visual aid.

-- James (, January 24, 2000.

Kondratiev made a similar observation leading up to 1930's and when he projected the West would pull out of the Depression, the boys in the Kremlin sent to the Gulag.

-- James (, January 24, 2000.

Thanks for the update.....Sure~ You know " The Big Iron " that runs everything may have a say soon as well.

-- kevin (, January 24, 2000.

No bank runs yet...

-- dinosaur (, June 29, 2000.

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