April 28, 2020

DJI – Ghost of the Great Depression

There are a few similarities that we can identify by looking at the weekly charts of DJI today and DJI on the edge of 1930s:

• First of all, there is a period of doubt where price volatility increases (red zone on the chart), which is then followed by the last push of the price to record the high point of the entire period.
• Secondly, a very sharp drop of asset price (49% in 1929 and 38% in 2020) which by itself signals that the prevailing trend is under threat.
• At last, just before the general consensus that the economy entered a recession, we see a strong retracement from the drop . In both cases, the price retraced back by a half or even a little more.

The pattern is repeating itself...

Read more at https://www.tradingview.com/chart/DJI/LMyftmBB-DJI-Ghost-of-the-Great-Depression/

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