Here is the 1987 stock market crash as set-up by the weekly bar chart of the S&P500 cash index.
The market crashed right on time and right back to the price levels from the massive 21-week consolidation at 235.
The market also failed to make a new high for 5-weeks and then the price fell below the mode since the high, which was at 320. The market also sliced through the previous mode at 289 (marked in purple) where most likely people were covering short positions against that support level. However, once through 289, there was no stopping the market until it fell back down to major, long term support at 235 (and a bit below).
You can see how extended the market was at the highs - it was extremely overbought.
Regards,
Tim 2:27PM EST Wednesday March 26, 2014
Comments
bergaler
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@2use, on the chart it says that it's a weekly view.
A-shot
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Also what granularity are you using? Is it 4 days?
A-shot
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Do you see any parallel with current market movements?
PS - i suggest you include a short guide on how to read the numbers under each graph to not confuse and lead people off.
AlexandreFF
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I don't understand how your charts work what are the numbers ?
timwest
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Hello AlexandreFF, I didn't see your question until now. I count the number of bars at a price and find the price with the most bars and put that number on the chart. Once the market disconnects (shown by a purple circle separating itself from the purple line) from that "mode" then count the number of bars starting with that "disconnect" bar. If you click on my name, you'll see the many charts I have published explaining this counting methodology that I devised. Thanks for asking and sorry for the slow reply - I didn't see your question.