DW8 Growth, page-14945

I have been doing some analysis of Nasdaq & have identified a rare phenomenon.

The 200DMA has crossed under the 52WMA on only 8 occasions since early 1971 when Nasdaq commenced.

The 200DMA is currently very close to the 52WMA & appears will cross under in the next week or so.

When has this previously occurred & how did Nasdaq perform?

25/6/1973 cross - 100 down from 136 peak on 1/11/1972. Bottom was 55 on 3/10/1974. Was down 26.5% in about 8 months & went down another 45% in 15 months. 55 / 136 = -59.55% down from peak in about 23 months. (High CPI similar to now)

30/3/1982 cross - 168.2 down from 223.5 peak on 29/5/1981. Bottom was 159.1 on 13/8/1982. Was down 24.7% in about 10 months & went down another 5.4% in about 2.5 months. 159.1 / 223.5 = -28.8% down from peak in about 12.5 months.

14/6/1984 cross - 235.6 down from 328.9 peak on 24/6/1983. Bottom was 225.3 on 25/7/1984. Was down 28.3% in about 12 months & went down another 4.4% in about 1.5 months. 225.3 / 328.9 = -31.5% down from peak in about 13.5 months.

20/4/1988 cross - was past bottom when it crossed.

5/9/1990 cross - 382.4 down from 469.6 peak on 16/7/1990. Bottom was 329.5 on 15/10/1990. Was down 18.6% in about 2 months & went down another 13.8% in about 3 months. 329.5 / 469.6 = -29.8% in about 5 months.

28/2/2001 cross - 2,207 down from 5,046 peak on 10/3/2000. Bottom was 1,129 on 8/10/2002. Was down 56.3% in about 12 months & went down another 48.8% in about 19 months. 1,129 / 5,046 = -77.6% in about 31 months. (Dotcom pump similar to Covid pump)

2/7/2008 cross - 2,251 down from 2,859 peak on 1/11/2007. Bottom was 1,268 on 10/3/2009. Was down 21.3% in about 8 months & went down another 43.7% in about 8 months. 1,268 / 2,859 = -55.6% in about 16 months. (GFC)

3/6/2016 cross - was past bottom when it crossed briefly.

21/7/2022 cross? - currently 11,247 down from 15,993 peak on 19/11/2021. Bottom? Is down 29.6% in about 8 months. Appears may cross within a week.

The above cross has occurred only 8 times in 51 years & 5 months.

2 times in 1988 & 2016 was already past bottom when crossed = 25%

3 times in 1973, 2001 & 20018 it went down a further 44-49% for an average of 14 months = 37.5%

2 times in 1982 & 1984 it went down a further 4-5% for an average of 2 months = 25%

1 time in 1990 it went down a further 14% for 3 months, however, the initial drawdown was smaller = 12.5%

Therefore the probability of being past the bottom or another 4-14% down in 2-3 months = 62.5%

And the probability of another 44-49% down in 14 months = 37.5%

Appears August/September bottom & 4-14% lower is a 1 in 4 chance. Past bottom also 1 in 4 chance.

And 1 in 2.66 chance it could be heading significantly lower for another year to bottom.

It's similar to 1973 & 2008 taking about 8 months for the 200DMA to cross under the 52WMA.