Will history repeat itself?

Good morning all,

I was talking with a friend and client on Friday about the activity in the stock markets and he asked me what I was doing on October 19, 1987. I told him I remember that day as if it was last week. I was in the Financial planning business back then and I was just beginning my study of Technical analysis. My reasoning behind getting out of stocks completely on Wednesday, October 14th, was more of a gut feeling or premonition that something big was about to occur. I told my wife that we were packing the bags and taking the kids to Disney World that weekend because I didn't even want to think about the markets. The Dow was down in excess of 100 points on Friday, October 16th, and I was now convinced that the coming week would bring an event that would live in our memories for years to come.

On Monday, we had spent the entire day at Mickeyland and we were in Epcot Center when I noticed a large group of people milling around the TV monitors so I could no longer restrain my curiosity. I made my way through the crowd and there I saw the headlines - "Dow down 508 points". It was a feeling that, to this day, is indescribable. My wife, who knows me better than anyone, knew better than to make a big deal out of the fact that I had predicted an event like this. She already knew I had plenty of ego already so she played it down like only she can do. I didn't really feel all that good about it because I knew that this event had caused a lot serious damage to people's net worth. All I knew is that my clients were safe from the destruction that had occurred and we'd all just have to wait and see what the ultimate effect on the economy and the world would be.

So this brings us to 2007, 20 years after the fact. This past Friday, October 19th, the Dow was down 366 points and the overseas markets are down sharply this morning with the DOW futures down 105 points at 7:30 AM EST. Will the markets experience another meltdown today? I don't know for sure but if you're a regular reader of my blog you know that I have been looking for a catastrophic event that would put things in motion for a protracted period of volatility and carnage in the financial markets. Maybe this will be the catalyst for that event. We'll just have to wait and see.

Dale F. Doelling
President and Chief Market Technician
Trends In Commodities