Dow Jones Industrial Average  Long – Term Time Forecast

Since the Dow Jones Industrial Average (DJI) major peak in January 2000  the two subsequent bear and bull markets  have had Fibonacci time ratio  relationships.  Assuming the January 2022 DJI top holds, these Fibonacci ratio relationships  could  project when the current bear market ends.

The Fibonacci sequence is as  follows (1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, —– to infinity).

Some of the main Fibonacci ratios are 1/1 = 1.00 equality, 1/2  = .50,  34/55= .618,  34/89 = .382.

The monthly DJI chart courtesy of Trading View illustrates  the Fibonacci time relationships.

The nearly 3 – year bear market  from January 2000 to October 2002 was almost a Fibonacci 34 – months.  The actual time length of 33 – months multiplied by .50 equals 16.5 months close to the 17 months of the October 2007 to March 2009 bear market.

The subsequent bull market was to the day an exact Fibonacci 5 – years!  This precision over a multi-year span is amazing.  The next bull market from March  2009 to January 2022 came close to a Fibonacci 13 – years.  When measured by months its 60/154 or .389 close to the Fibonacci ratio of .382.

Measured from year to year the major DJI bear markets since 1929 are as  follows.

1929 + 3- years = 1932

1937 + 5 – years = 1942

1968 + 2 – years = 1970

1973 + 1- year = 1974

2000 + 2- years = 2002

2007 + 2 years = 2009

2022 + ?

One of the guidelines in Elliott wave theory is alternation – expect something different.  The prior two DJI bear markets measured  from year to year were “2” if we expect something different then the current bear market probably won’t be ending in 2024. 

What about ending in 2023  a  1 -year bear market?  In 2008/2009 the US government spent its way out of the economic crisis. They got the money to spend by issuing US government  bonds.  They did the same thing 2020/2021 to combat the Coronavirus crisis.  The US government now has an enormous amount of debt on its  balance sheet, and they are now forced to raise interest rates to combat inflation.  If interest rates continue to rise it increases the costs of servicing  the  debt payments.  Its doubtful the US government will be able “spend” its way out of the  current economic crisis  and that could mean a prolonged bear market for US stocks.

How long is prolonged?  How about a 5-year bear  market which hasn’t happened in the US  for 80-years.  It would certainly be something different. 

The price forecast for a major bear market bottom is rough estimate.  A future blog will examine the possibility of an intermediate bottom forming  later in 2022. 

Published by Mark Rivest

Independent investment advisor, trader, and writer. Articles have appeared on Technical Analysis of Stocks and Commodities , Traders.com Advantage, Futuresmag.com, and Finance Magnates.

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