Monday, January 17, 2011

Thousand Mark Reversals In Major Stock Indices

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In 1990, I recognized a rather curious pattern between financial markets and collective human behavior when on July 16th and 17th of that year the DJIA closed at 2999.75 two days in a row, i.e., just below the psychologically important 3000 mark. The DJIA never closed at or above 3000 that year and immediately with the DJIA reaching this high point Saddam Hussein made a speech threatening Kuwait after which Iraq invaded Kuwait precipitating an oil-shock and 25% reversal in stock prices as the world economy was shoved into recession:

I've since discovered that this pattern of historical "shocks" occurring with reversals from psychologically important thousand marks in major stock indices like the DJIA and Dow Composite index is somewhat common.

There's reason to suspect a similar sort of historical pattern is going to repeat here, but on a much, much larger scale.

Distinct patterns of mass human behavior will be dismissed by the intellectual elite governing what we are 'supposed to believe' as "coincidence". In the face of all empirical evidence they will purport their mathematical models tell them with absolute certainty that the stock market follows a 'Random Walk' because investors are rational, markets are efficient and only unexpected 'news' moves aggregate prices one way or another. That historical reality is flagrantly contrary to such notions matters little since careers and lifelong incomes are derived from proselytizing according to the doctrine of serving and worshiping Mammon in gross disrespect of any God that calls for an ethos of sharing resources and wealth for the common good.

The US DJIA, US NYSE, UK FTSE, French CAC, German DAX and DJ European STOXX are all topping around psychologically important thousand marks and threatening to reverse course. This implies the potential for a significant historical shock(s) like occurred with the terrorist attacks in the U.S. on 9/11 and the global financial crisis that struck in the autumn of 2008.

Here are current charts of the key indices:

Here's a quick comparison of thousand mark reversals in the US DJIA, US NYSE, UK FTSE, French CAC, German DAX & DJ Euro STOXX at the key historical junctures of 9/11/01 and September/October 2008. This is something trusted analysts in academia have never ever and will never ever look at and consider since they are so above the relevant historical reality they claim to have modeled accurately as being a 'random walk':

September 11th, 2001:

U.S. DJIA breaks below 10K, THEN 9/11 occurs:

U.S. NYSE breaks below 6K precisely when 9/11 occurs:

UK FTSE breaks below 5K precisely when 9/11 occurs:

French CAC breaks below 4K precisely when 9/11 occurs:

German DAX falls below 5K just before 9/11 occurs:

Financial crisis of 2008:

DJIA breaks below 11K just as the financial crisis hits:

NYSE breaks below 8K and crisis occurs:

British FTSE falls below 5K just as crisis hits:

French CAC drops below 4K:

German DAX breaks below 6K:

Dow Jones European STOXX 50 index breaks below 3K:

Will a reversal from DOW 12K, NYSE 8K, FTSE 6K, CAC 4K, DAX 7K and STOXX 3K coincide with a new historical shock possibly involving the chemical SCUD missile attack on Israel I foresaw almost 20 years ago during the 1991 Gulf War?

This is a distinct possibility.

What gain might there be from what comes next?

Maybe only this time around harsh historical reality will lay asunder once and for all the self-deluded perspective of those who wish to maintain that selfishness and greed are the optimal means by which a free people should govern themselves in pursuit of social harmony ('General Equilibrium') and maximum happiness for all ('Pareto Optimality'). This extraordinarily popular self-delusion has always been destined to catastrophically fail IMHO.

Adam Smith's "invisible hand" argument has been twisted into the ultimate self-serving lie of Capitalism:

Being selfish and placing faith in the 'invisible hand' of 'The Market' is a woefully inefficient, unjust and irrational way to steward this world. (Bear in mind "free market competition" is ultimately a struggle to find the best ways to cooperate and provide for one another!)

Sound collective judgment and social harmony comes from loving others as thyself and placing our faith in God...

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