In 1929 the DJIA peaked on 3rd September at 386.1 and subsequently fell to the 195.35 low on 13th November. This first down swing only took about 2.5 months and was followed by an upward retracement of 53.42% to 297.25 on 16th April 1930. A rising wedge formation was formed giving an early warning of impending trend reversal. What happened after the breakdown from this wedge was a major downtrend that lasted about 2 years 3 months. The DJIA finally stop declining in July 1932.
As December 2009 begins DJIA is currently approaching a major downtrend resistance line as shown by the red bold line. It is also moving closer to the 53.42% retracement denoted by the red dotted line. There is also a rising wedge formation just like in 1929. Will history repeat itself? Is there going to be a major fall that lasts longer the fall from October 2007 to March 2009? Monitor closely the rising wedge breakdown and the critical support at 6440.08 formed on March 2009.
No comments:
Post a Comment