Thursday March 19, 2020
The third wave in 2008 ended aboutu 8000, a drop of 6000 from 14,000.
6000/14000 = a drop of 43%.
So far 29586 - 19356 = 10230/29586 34%
If this pattern repeats, the third wave has not yet ended.
Third Wave Target
We posted this chart a few days back. It looks quite reasonable, for a third wave low. And it may be a fourth wave bounces back to the top of this range with a final fifth going to the half way point 29586 / 2 = 14793
The striking thing about this decline is the speed of it. 2007 - 2009 Took about 1.5 years. Now one third of the index value has evaporated in just one month.
Thinking the Un thinkable
A first low at 14,000 would be comparable to the 2007 - 2009 sell off. But that sell off happened during what turned out to be a continuing bull market. What if this is totally different, say 1930 - 1948 or 1972-1982. In eh first instance the initial low was set in 1932, a couple of years after the top in 1929. but the averages never bettered the 1929 top until 1954. It is hard to imagine such a prolonged stagnation now. But 1972-1982 lasted ten years again with initial bottom set after two years in 1974.
Don't dismiss any possibility here. The XLE energy ETF has already taken out the 2009 low.
XLE
PMO is searching for a bottom but the vertical condition of the chart makes any identification of such near impossible now.
Comments