The lower line.
In June 1932, the DJIA hit a low of 40.3149. The lower line shows a start there. By looking at the next place it touches and all points are above the chart shows that the next point that it touches was in August 1982 at 769.98. Doing the calculation shows that the market has gone up at roughly a 6% increase if we follow that line. What I find interesting is the 50 year cycle. Based upon that, I am anticipating another pull back to that line in 2032. Assuming the DJIA goes up at a 6% rate since 1932, then the DJIA will pull back to 14, 300 at that point in time.
The second line starts at a high in 1937 and also goes up at a 6% rate. What does this show. We have been very overbought since 1997 until this year when it has dropped.
Where should it be and have we hit the low. Doing the calculations shows that the midpoint between those two lines is 8300. The DJIA closed at just slightly over 8000. We are probably getting over sold at this point as we moved back to underneath the center line. Just as it was overbought in 1930 and had to have a correction. So will it be in 2032. In 1982 there was a long period of consolidation.
I will try to post something like this each year.
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