Sunday, February 01, 2009

Dow 8000

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The DJIA is perched right above the psychologically important 8000 mark closing at 8000.86 on Friday:

I have pointed out over and over again how historical shocks often occur after 'failures' to hold above signficant thousand marks in the DJIA. Let me review a couple of key examples.

On July 16th and 17th of 1990, the DJIA closed at 2999.75 two days in a row, not closing above the psychologically important 3000 mark until the following year.

Just as the DJIA reached the 3000 mark, Saddam Hussein gave a speech threatening Kuwait on what was then Iraq's President Day honoring the date of the coup that brought the Butcher of Baghdad to power.

That weekend, Iraq started massing troops on Kuwait triggering a 5% reversal in the DJIA from the 3000 mark.

Then, on August 2nd, Iraq invaded Kuwait causing the Persian Gulf Crisis, a spike in oil prices and a 25% drop in the DJIA by October of that year.

Thus, the reversal in mass psychology with a failure at Dow 3000 in the summer of 1990 manifested as Iraq's invasion of Kuwait and the beginning of what would be a prolonged struggle with Saddam Hussein's Iraq.

As for 9/11, the DJIA broke decisively below Dow 10,000 on September 10th of 2001....THEN 9/11 occurred. Because the Dow failed at the 10,000 mark, I was not as shocked as most people when I heard the news that a plane had crashed into one of the Twin Towers that September morning. I was already on the alert for some sort of historical crisis.

Now, I'm not offering an explanation for what is admittedly a very odd pattern in mass psychology, although I do have a hypothesis related to the Quantum Mind, but I'm astute and honest enough with myself to recognize that the historical pattern exists and has some degree of predictive value.

We are currently at a historical juncture where the pattern in mass psychology could repeat.

This is far from being a solid expectation, but it is a reasonable one.

Thus, with the DJIA poised just above 8000 at the current juncture, one should be on the lookout for a failure from the psychologically important 8000 mark that could manifest as a historical shock of some sort.

It's possible that the coming historical shock will eminate from the Korean Peninsula given the news that North Korea just scrapped the non-aggression pact with South Korea as Dow 8000 has been approached. Thus, this could be the international crisis that would come from a new breakdown in collective confidence.

Another possibility is Israel is about to strike Iran's nuclear sites, something I've been concerned about for some time. Israel's ambassador to Australia apparently slipped up when the cameras were rolling in suggesting that the strategic threat posed by Iran would have to be dealt with in February:

I hope this is not the case, but a former U.S. intelligence official concurs that we are on the verge of Israeli military action to nullify the developing Iranian nuclear threat.

If Israel does strike Iran, and chemical missiles start raining down on the Jewish state in response, then know that the prophetic Apocalypse has begun and respond accordingly.

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