Dow Jones 1987 and 2007: crash then, crash now

Someone just gave me a piece of technical analysis information written by a research department of one big investment bank in Europe. Sorry can't disclose any names.

I'm still wondering why people still believe in technical analysis to guess the future stock movements without any market theory behind this.

By comparing key similar characteristics between DJIA index movements prior to October 1987 crash and that recently, this analysis surprisingly suggests a possibility of stock crash the near months. Good God!

Because I can't show the original document, I had to modify the graphs with data taken from yahoo finance in order to blog this.

It's a technical analysis, so best just see it and don't try to think about it.




UPDATE:

Don't worry there's a system called "Circuit Breaker".

7 comments:

Anonymous Friday, 30 March, 2007  

Interesting. And both are within the same 14-month period. One month to go... Should we sell? Or short sell?

Anonymous Friday, 30 March, 2007  

You're right, bleu. The data is exactly the same 14-month period. Most investors (our clients and maybe others around the world) have been influenced by this graph for the last couple days. They unfortunately sold and did some short-sellings. If this phenomenon is extended with more volume to come, then it may crash, probably in one month.

Roby Monday, 02 April, 2007  

self-fulfilling prophecy?

Anonymous Monday, 02 April, 2007  

he he he... you're right Roby.
this world has to live with self-fulfulling prophecy. :)
otherwise nothing, no meaning and goal.

Anonymous Wednesday, 04 April, 2007  

A financial footprint...I guess.

Anonymous Wednesday, 04 April, 2007  

webmaster, thanks for the comment.
a financial footprint maybe. proving that some big players are actually creating the market, which is suppossed to be random, to follow a desired stochastic movement. the goal is to fulfill the prophecy as roby mentioned above.

Anymatters Monday, 03 August, 2009  

it didn't the crash in one day but it was crashing in more than 1 year from Oct 07 to Feb 09!!!

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