Dow Jones: How the log Fibs show $88,000.

No matter how odd it may sound now, we have come up with a simple model using the logarithmic Fibonacci extension levels to determine the next long term target on Dow Jones.

We have timed the beginning at the end of the great depression in the early 1930s. The ATH before the depression is Fib 1 and the bottom Fib 0. The market recovered the ATH in 25 years. After that we see a very peculiar occurrence on this Fibonacci log scale. Every market top follows the 0.4, 0.9 sequence, i.e:

- The next peak of the index was on the 1.4 Fibonacci extension. What happened then was a 16 year period of anxiety and consolidation before the next break-out.
- This came to a peak on the 1.9 Fibonacci extension which was the 1987 Black Monday crash.
- The next peak was just before the Dotcom crash of the 2000s on the 2.4 Fib (actually was exactly on the 2.5).
- The current coronavirus crash was on the 2.9 Fibonacci log.

According to this model, the next market peak should be on the 3.4 logarithmic Fibonacci extension, which is priced around $88,000. This may sound unrealistic right now but if you look back at every prior high, the market would always thought of the next long-term target as unrealistic. It went from $380 in 2029 to $955 in 1966, then $2700 in 1987, $11,500 in 2000 and now $28,000 in 2020.

As you see the time sequence from .9 Fib to .4 Fib is roughly 130 - 150 months. The time sequence from .4 Fib to .9 Fib is roughly 260 - 270 months. The next ($88,000) peak covers a .9 to .4 Fib, so according to the model it should be delivered within 130 - 150 months, timing this market peak approximately within 2030 - 2032.

What is also interesting is that the LMACD is printing the same formation on every Fibonacci peak. That is an aggressive bearish pull down. As you see, for the current coronavirus crash, this formation is already completed.



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