Years ago I built this 40 year chart for the $COMPQ which I call the, ‘HISTORY CHART OF THE END OF THE WORLD.’ One day I thought about all the events that I’ve experienced as a trader and decided to put them on a chart to see what it looked like. In hindsight I wish I had put the end of the world events on the INDU or the SPX, but I put them on the COMPQ which still gives you a feel for what happened in the past.
Some of you veterans who were trading, I hate to say it, in the old days, will remember some of these events which felt like the end of the world when you experienced them in real time. Starting at the 1987 crash, it is still the biggest one day percentage move down in history which totally felt like the end of the world, but as you can see the world didn’t end.
In 1991 there were 2 events that felt like the end of the world which were the saving and loans crisis and the start of the first Gulf war. What the 1987 crash, the saving and loans and the 1991 Gulf war created was the green massive bullish rising channel or flag which launched the biggest stock market rally in history.
Some of you may remember in 1998 the LTCM, Long Term Capital Management debacle, which led to a hard 3 month shakeout which felt like the end of the world, No one knew at the time what would happen, but as you can see the COMPQ broke out of the red expanding triangle with the last consolidation pattern of the 90’s tech bubble, the red bullish rising flag, forming on the top rail the expanding triangle.
This post was published at GoldSeek on Sunday, 20 August 2017.