This is a DJI comparison of the Great Depression and the phase that preceded it against the current COVID sell-off and the phase since the DotCom bubble that led to it.
** Please support this idea with your likes and comments, it is the best way to keep it relevant and support me. **
As you see both time phases are Megaphone patterns. Both started on high volatility (A,B,C,D) while the Megaphone was emerging and after testing the Higher High trend line for the longest time of the phase (E), the price broke above it making an over-extension (F). This is usually where most retail and other dumb money are trapped during recessions. What followed (F) during the Great Depression was of course a complete and lengthy collapse of the system, the worst recession in history. Also look how harmonically the 1M MA100 is moving on both patterns.
Will history repeat itself? I want to know your opinion about it.
*For the record the purpose of this comparison is not to spread panic, I will leave it to the mainstream media to do so. But it is so intriguing that I think can make a great discussion in the comment section below! So will it fill the gap?
LOL! Feels weird to like this post. Great analysis. Brutal outcome if true. Like is for the analysis, not the outcome. ;)
TradingShot
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@akozlowski01, Well of course the like is not for the potential outcome! Nobody wishes for this to happen a continuous bull market is making us more easy money by buying the dips, than recessions. I only posted this to highlight the similarities which are striking, dont you think?
akozlowski01
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@TradingShot, Couldn't agree more. Similarities are very striking. Been following the larger fundamentals and except for (and maybe in spite of) extraordinary intervention by the Fed, in my humble opinion, a bigger down seems like the most probable course for the economy. I have all my holdings sitting in cash. Been hard to watch this bounce, but all the signs are there. Good job.
@TradingShot, good idea brother!
For those who upvote this post 🔺
Your Next 30 years will be land of new opportunities!
TradingShot
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@ArShevelev, Thank you! Give people motive to upvote!
Miamicane1
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@akozlowski01, The key is CAH is King. Patience is a virtue and there will be bargains galore for those who wait. It will be like shopping at the Dollar Store.
Be safe and healthy everyone.
TradingShot
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@Miamicane1, Trading and patience is the greatest combo for steady low risk long term profits.
gillluck
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Definitely hope this does not happen but something feels off. The stock market is rallying due to the fed printing unlimited dollars while we still have 26 million Americans unemployed. Feels like we used a bandaid when we need stitches.
TradingShot
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@gillluck, Excellent point and I am preparing a chart related to unemployment. Stay tuned.