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Past Market Panics and Bottoms. Similar Trading Action. Usually there is a smash, crash or panic This is followed by a retest, the market bottoms and a bull market begins The Exceptions were 2001 and 1929
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Similar Trading Action • Usually there is a smash, crash or panic • This is followed by a retest, the market bottoms and a bull market begins • The Exceptions were 2001 and 1929 • However, all other panics, 1907, 1921, 1938, 1962, 1970, 1974, 1987, 1997, 1998, 2002 the market bottomed then entered a bull market
Huge Gains After Successful Retest • You can break down to new lows on a retest • 1907 and 1929 Lows in November after October Crash, Market Still Started Rally
Conclusions • Usually Panics and Crashes Mark Bottoms • Need a period of basing or retesting • If you come out of that period could see 60 to 70% return in the market in the next 1-2 years from the low. • Only Time Panic did not mark bottom was 1929, but even then you got a 48% rally from November 1929 to April 1930