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Lindsay: How Low Will It Go?

If the Dec high was point H of Linds ay's long cycle (approximately 20 years) as suspected then we can examine past declines from H to I to get an idea as to how low this decline will go. Unfortunately, with only four previous long cycles to examine (since 1921) the sample size is less than "significant".

A Simplication of all the long cycles since 1798

The average decline from H to I is 23%. The smallest decline was 10% (1990) and the largest was 45% (1973-74).

If the Dow falls 10% from the Dec high point I will occur near 16,249. If the Dow falls 23%, point I will occur near 13,902.

Expanding our search to include the declines from B to C, F to G, and J to K (D-E and L-M are excluded as they are the terminal declines of multiple cycles and expected to be abnormally large) the average decline is 21% and the smallest decline was 6%. If the Dow falls 6% from the Dec high point I will occur near 16,971.

Dow Chart

Reminder: this analysis is only helpful if the Oct low was not point I. The Dow fell 6.7% during Sept-Oct, 2014.

 


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