The UK and US stock markets are on a knife edge of a possible second price collapse as they are following, almost exactly, the same directional path as the Dow Jones did in its 1929-34 series of crashes.
There are so many similarities between the current moves in the FTSE and Dow Jones with what happened in 1929-30 that is very scary. The stock market could be on the brink of a possible collapse.
ShareHunter correctly identified the end of the 4 year ‘bull’ market in May 2007 and, in June 2008 forecast the potential for a market crash, giving ample warning of the potential for the 50% collapse in the FTSE 100 index.
The FTSE is once again on the edge of a cliff: The 1929 Wall Street crash wiped 50% off share values and the 2008-09 crash has done exactly the same for the FTSE. The post-crash recovery in 1930 took prices back up to the half-way level of the collapse; the 2009-2010 recovery on the FTSE has done exactly the same.
Then in 1930 the market recovery petered out; the market crashed back by 28%. This could happen again now”.
According to the latest ShareHunter research, if the historical pattern continues to be followed by the FTSE then it is likely to crash down to the 4100 level, if not to 3500. The FTSE has turned by 7% in the last 3 weeks and could soon fall by another 20% or so.
Of course, it may not happen and the market may just blip along sideways before it makes another push upwards but it is well to be aware that there are a number of technical signals that are suggesting that UK and US share prices may take another big hit.
More detail and illustrative charts are given below in the longer blog dated 28th January.
Watch this space….
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