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Deja vu, all over again!
As yet another exercise (in futility?), here is my analysis, such as it
is, of this market vs. that of 1929 and 1987. As you can see, the DJIA
April-July 1997 run-up (29.15% in 76 trading days, or 0.38%/td) has
exceeded that of 1987 (22.86% in 67 td, or 0.34%/td) in both rate and
extent. It has almost matched 1929 (29.93% in 68 td, or 0.44%/td). Most
comments that I have read have been an expectation of a small pullback
in the near-term, followed by a "final" blow-off run-up, before a larger
correction in the fall of this year or early 1998. It may be that this
market is "ripe" enough to fall already! If so, judging by the Fib
retracements of 1929 and 1987, it should (could) correct to the Fib line
at 5250, "oscillating" from ~4650-5850.
The other chart shows 50% retracement levels from the correction lows of
1982, 1987, 1990, 1994, 7/96, and 4/97. The corrections of 1987 and 1990
corrected to within a dozen points of the 50% levels from the 1982 low
and 1987 correction low, respectively. Good "candidates" for correction
levels might be: 5310, which is 50% from the 1990 correction low (this
is also near the 5346 JUL 96 low); and 4516, which is 50% of the whole
move from the 1982 low (this is near 4528, which is twice the amount of
the run-up from the APR 97 low; both 1929 and 1987 corrected approx.
twice the amount of their run-ups).
1929 took 68 trading days to run up, 49 (72% of 68) to correct.
1987 took 67 trading days to run up, 38 (57% of 68) to correct.
Thus far, this 1997 run-up has taken 76 trading days. 57% more (43
trading days) would be approx. SEP 30; 72% more (55 trading days) would
be approx. OCT 16.
Anyway, just food for thought. :)
Jim Harmon
jrh@xxxxxxxxxxxx
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