Flashing Signs of Historic Top as Dow Drops 2.6%

The Dow dropped 367 points on Friday with all 30 Dow Jones Industrial stocks closing down – a fitting salute to Black Monday 20 years ago. Where were you on October 19, 1987, when the Dow crashed 508 points, losing more than 22% of its value? I was editor of a weekly business journal in Washington, D.C., and I remember reading many financial news stories about a technical analyst named Robert Prechter who had predicted the crash. It was my first inkling that something called Elliott wave analysis could help to forecast market moves.

Pop quiz: At what level did the Dow begin that fateful day? (Hint: A far cry from the recent 14,000+ high, which made this Friday’s drop only 2.6% of its value.)

Answer: On Black Monday, the Dow began the day at 2247 and ended the day at 1739 to record its largest one-day percentage decline.

Bob is still at it, just having released his most recent Elliott Wave Theorist after the markets closed this Friday with an insightful analysis of stocks, oil and inflation. Learn more about how to read his latest analysis in the new Theorist here.