Dow Jones Industrial Average
400
August top
375
350 325 300 275 250 225
May top
Decline into first week of August
June bottom
200
Oct Nov Dec 1930
May Apr Mar Feb
Jul Jun
Sep Aug
W.D. Gann, a well-known technical finance trader, discovered this crucial 90-year pattern. History doesn’t always repeat, but it definitely rhymes… And this cycle should not be ignored . Aside from the nearly identical price and time patterns from 1929 and now, there was also a trade war during the late 1920s/early 1930s as well (the Smoot-Hawley Tariff Act). The similarities between 1929 and 2019 are incredible in many ways. The key to understanding why these cycles are important is that Gann observed parallels between what is happening then and now, the dates at major market turns, along with global events, trade wars, etc. Looking at the two charts, it is hard to dismiss the similarities. The trade war between the U.S. and China is now escalating, with additional tariffs set to be implemented by the U.S., and China is now threatening to retaliate as well. Let me be clear – I’m NOT looking for a
The Wall Street Crash of 1929 was the worst stock market decline in U.S. history. The Dow lost $30 billion in market value in just four days. Above is a chart of the legendary stock market crash that year... I want to highlight the timing in 1929. The market rallied into May, with a big correction that month and then a bottom in June. Then the market topped in August... You can see what happened afterwards. The stock market this year is tracing out to the same identical pattern in price and time as 90 years ago... The May high led to a big correction with a bottom in June and then a top in August. The first two weeks of August are historically a turning point to watch in the market. On average, the stock market performs the poorest during September, with the three leading indexes achieving their worst numbers during this month.
18
October 2019
Made with FlippingBook - professional solution for displaying marketing and sales documents online