This post is an update to a few looks I’ve given to the comparison of the Dow Jones Industrials crash of 1929 to the Nasdaq crash of 2000.
New Roadmap Dow 1929 Versus Nasdaq 2000
Revisit Roadmap Dow 1929 Versus Nasdaq 2000
Updated Roadmap Nasdaq 2000 Versus Dow 1929
Dow Jones Industrials 1929 Crash
The Dow dropped 90% during the crash which lasted 34 months. The market then rallied for 57 weeks for a total of 91 months from the high. Price then dropped quickly for 12 months which was followed by an 8 month rally.
Nasdaq Composite 2000 Crash Scenario
As a comparison, the Nasdaq dropped 78% during the crash which lasted 32 months. The market then rallied for 60 months. Price then dropped quickly for 13 months which has been followed by an 4 month rally (so far). While the month counts are not exact, the similarities and symmetry of the moves is difficult to dispute. If the current rally lasts 8 months (as it did in 1937) the current move will continue into November.
Dow Jones Industrials 1937 Bounce
The bull market off the 1932 low ended in March 1937. Price dropped 50% in 55 weeks to a 1938 low. The market rallied for 32 weeks and 63% from that point.
Nasdaq Composite 2009 Bounce Scenario
The Nasdaq Composite ended the bull market in 2007 and then fell 56% in 71 weeks. The amount of the decline was very close to the Dow drop, but the duration was 16 week longer in duration. Both the Dow and Nasdaq had rally attempts that lasted 16 and 18 weeks before the final low was put in.
The current rally has lasted 13 weeks and has about 15% more to go to match the corresponding Dow move. Note, after this rally was completed on the Dow, price made a new low around 32 months later. Should the pattern continue to be similar, price will be bullish for several more months and then bearish for a over two years.
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Tags: DJIA-Dow Crash 1929-1942 · Market Outlook · Nasdaq Charts (IXIC) · Roadmap2 Comments
Andy, Looks like on your DOW chart there was 38% pullback before rally continued higher. So I guess 38% pullback on NASDAQ from top would still be the norm, before another leg up occurs. Do you agree? Thx
regards, Ray
Ray – yes, once this move completed, the Dow dropped about 38% from 1938 to 1942. That is a long bear market. The correction during the current move was 13% from the top starting in July 1939 before completing the move up.