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Friday, September 18, 2009

1920's Dow versus 2000's Nasdaq

I found this really amazing chart between the two indices. As you know, a lot of people were/are making correlations to 1938 bear... And I actually was one of the first stating if the fractal did work we would easily go to 1000-1100 points in S&P

See here: http://jogarembolsa.blogspot.com/2009_03_01_archive.html it's the first graph

See the correlation?

Well this next chart that I spent the last few hours analysing shows a fractal, a really long term one, of Dow in the 1920's until 1940's and the Nasdaq.

Why the correlation you ask? I see the Nasdaq as the soaring Dow of the 20's. At that time, the Dow was the main index, where the speculation money and the speculation stocks were traded. Railroad stocks, oil industry and real estate, etc.

Well, roll forward to the 1990's... What was the big speculation index and the stocks that most people traded in an Euphoria state of mind such as people did in the 1920's? Exactly, the NASDAQ. Stocks such as GOOG, AMZN, AAPL, BIDU, DELL, the former AOL, etc...

 
See all the amazing correlations, regarding time which fit perfectly almost to the day, as well as percentage moves are all pretty much similar. 
This would mean that the big drop such as P3 wouldn't be in the cards, although the bear wouldn't be over for almost 4 more years, only ending in 2013 more or less. Instead we'd be stuck in a trading range with a lot of 25+% movements, both up and down and reaching a low in 2013 by testing 2008's bear market lows or breaching them just by a few % points. 
Also this would fit nicely with the Benner-Fibonacci Cycle Model that I posted a while back.


The 2021 major bottom cycle would be correspondent to the 1949 major low before the big bull move until the 1960's.

This in no way would harm the EW counts, we would just be in a kind of triangle correction for almost 13 years or so (since 2000)

Don't forget the good trader is the one who adapts to new conditions and makes use of new information... P3 may well happen, it may not as well, so I'm putting this on the table.

To me these are now the 2 top viable paths. Either a P3 or a triangle, either way bull market this is not...

I'll see you on the other side..

EDIT: Also if correlations maintain a top would be in the cards around October 10th, is there any phi turn date or anything relevant around that date?
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