07-06-2010, 01:37 AM
[url="http://www.cnbc.com/id/38092759"]Dow Repeats Great Depression Pattern: Charts[/url]
Quote:The Dow Jones Industrial Average is repeating a pattern that appeared just before markets fell during the Great Depression, Daryl Guppy, CEO at Guppytraders.com, told CNBC Monday.
ââ¬ÅThose who donââ¬â¢t remember history are doomed to repeat itââ¬Â¦there was a head and shoulders pattern that developed before the Depression in 1929, then with the recovery in 1930 we had another head and shoulders pattern that preceded a fall in the market, and in the current Dow situation we see an exact repeat of that environment,ââ¬Â Guppy said.
The Dow retreated 457.33 points, or 4.5 percent last week, to close at 9,686 Friday. Guppy said a Dow fall below 9,800 confirmed the head and shoulders pattern.
The Shanghai Composite is seeing a very rapid collapse, falling below 2,500, which suggests the major fall in the Dow, he added.
In the European markets, Guppy says Frankfurt's Dax is witnessing a different pattern to London's FTSE.
Guppy uses the broad trading band as measurement- giving the Dax a downsize target of 1,500. The same head and shoulders pattern seen in the Dow can also being seen in the FTSE, he added.