NASDAQ FALLS 0VER 50 % IS IT A REPEAT OF 1929?

September 28 2002

Well theres been alot of speculation about the current trend of the stock markets particually in the USA .

How far will the stock market go down?
Are we in a Recession or a Depression?
How long will the bear market last?

So heres a few interesting bits of history.

On the 3rd of September 1929 the Dow Jones reached its top at 386 points.
between the 3/09/29 and 13/11/29 the market fell 188 points or 45% in 71 days to a low of 198
it then had a rally from 14/11/29 to 17/04/30 of 99 points or a 33% rise to 297
then came a 2nd fall of 142 points to 155 on 17/12/30 a 47% fall
a 2nd rally followed of 41 points to 196 a 20% rise till 24/02/31
a 3rd fall followed of 76 points to 120 a 38 % drop on 02/06/31
a 3rd rally of 37 points to 157 a 23% rise
a 4th decline of 72 points to 85 on 05/10/31 a 45% fall
a 4th rally of 34 points to 119 on 09/11/31 a 28% rise
a 5th fall of 49 points or 41 % to 70 ended on 05/01/32
a 5th rally of 19 points to 89 a 21 % rise till 09/03/32
then finally a 6th fall of 49 points or 55% to reach a low of 40 points on the 08/07/32

Overall from 03 September 29 to 08 July 32 the market had fallen 89% or 346 points in 34 months. From there we saw another bull run to 1935. When we compare these figures with the Nasdaq 100 futures contract over the last year we see some interesting comparisons.

On 24/03/00 the 100 reached its peak at 4882.
By 14/04/00 it was down 1732 points to 3150 or a 35% fall
From 17/04/00 to 05/05/00 it gained 760 points to reach 3910 a 19 % rise.
It fell 1007 points from 06/05/00 to 26/05/00 to 2903 a 25% fall.
Another rally came with a 1232 point gain to 4135 a 29% gain, still some 747 points from its peak in March.
The market then fell some 667 points or 16% to 3471.
A 3rd rally of 715 points brought it back to 4186 or 17%, still 696 points off the all time high.
The market then fell 2078 points or 49 % from Sep 00 till January 01 to reach a low of 2108.
From 5/01/01 till 04/04/01 the market fell to 1360 thats down another 35 %.
Well since i last edited this page on June 2nd 01 the Nasdaq has fallen another 2% to below 1200 one of the big factors in this drop was falls in shares such as CSCO down from $20.05 to $11.23 INTC down from $31.68 to $14.62 MSFT down from $66.89 to $45.25 ORCL down from $18.00 to $8.40 SUNW down from $17.72 to $2.64 and of course IBM down from $108.18 to $60.36

So from March 00 to 27 September 02 the Nasdaq has fallen from 4882 - 1180 thats 3702 points or 75%. Well does it equal the 1929 crash, not yet but its not that far off either, the Dow lost 89% of its value back then. If the Nasdaq did that it would have to fall to 538 i can't see that happening. Oh just one other point "volume" this also is a very important indicator In Sep29 the DJI volume was 100 million shares, in October when the market turned down the volume was 141 million. In Nov 29 the market bottomed volume was 72 million. At the bottom of the bear market in July 1932 the volume was only 23 million for the month. Currently the volume for the DJ is around 1.306 billion and 2.073 billion shares for the Nasdaq, thats very high volume for a down trending market, which means there may still be some more downward movement. Well since the 18 April we've seen 3 tops at 1993, 1995, 2076 as well as 3 bottoms at 1755, 1771, 1771 so we saw a 633 point rise then a 238 point fall a 240 point rise then a 224 fall then a 305 rise. Well based on those figures we see good support between 1755 and 1771 and resistance between 1993 and 2076, so you make the choice whether to go short or long, remember the market has a way of fooling most people 90 % of the time.!