To understand what stock market analysis would have to do with predicting future world events, first you must realize that historical events, both positive and negative, are directly associated with investors' beliefs and expectations concerning the future course of the economy and corporate earnings. Movements in the collective beliefs and expectations of investors, in turn, are recorded in the aggregate movement of stock prices, particularly in the movement of major stock market indices like the Dow Jones Industrial Average (DJIA). Accordingly, if you are able to accurately predict the future general movements of stock prices and stock averages like the DJIA, then you are able to anticipate the tone of historical events that will occur since those events will be consistent with either rising or falling shifts in investors' beliefs and expectations for the future.

The best way to show this is by overviewing some cases in point. Of particular interest are major cyclical turning points in the movement of stock prices from so-called psychological barriers in major stock averages like the DJIA.

Contrary to the delusional reigning theories in modern economics and finance, people are generally irrational and behave in a predictably insane manner. This is most evident in cycles in the stock market and economy where there are recurring upswings of greed followed by downswings with pervasive fear. The cycles of greed and fear are somewhat predictable because of measurable extremes of collective optimism and pessimism reached at relatively important cyclical tops and bottoms.

(Note that the cycles which occur are of varying scales and smaller cycles occur within larger cycles that occur within yet larger cycles as described by The Elliott Wave Principle. Some of the best, current work that reveals the phenomenon of market and economic cycles is being done by Robert Prechter, Chris Carolan and Peter Eliades.)

One the most impressive examples of how it is possible to predict important cyclical turns in the stock market has to do with so-called "psychological barriers" at key thousand marks in the DJIA.

Historically, when the major stock averages, and the DJIA in particularly, reaches or trades around psychologically important round numbers like thousand marks, the stock market may top-out and, failing to hold above the mark, sharply reverse course. The remarkable feature of these stock market reversals at thousand marks in the DJIA is that they are usually associated with bad news that follows the market top.

For instance, right after the DJIA failed at Dow 8000 in late-October of 1997, a mini-crash occurred in association with a financial panic in Asia.

Finally, between 1966 and 1982, the DJIA reversed from the "Magic 1000" barrier several times. After each reversal, all kinds of troubles emerged ranging from OPEC oil embargoes, to the Vietnam War, to Watergate. One of the most notable cases occurred in October of 1973 when the DJIA rose to just below Dow 1000 as the Arabs launched a surprise attack against Israel which, in turn, led to a major East/West confrontation and an Arab oil embargo against the West. Consequently, the world economy entered a severe contraction and stock prices plunged in the largest market correction up to that time since the Great Depression.

During the past two years, the stock market has been forming a top of historic scale. In terms of the Elliott Wave Principle, what has been developing is referred to as a Grand Supercycle top. In the DJIA this top has formed above the psychological critical 10,000 mark, the most important psychological level reached in the Dow since the market struggled with the "Magic 1000" mark between 1966 and 1982. In the Nasdaq Composite, where the manic bubble in mass psychology was most pronounced, the final top was clearly reached at the 5000 mark since which the index has already retreated some 60 percent.

In the autumn of last year we began to see just how devastating the impact of a reversal from Dow 10,000 will be in terms of mass psychology and world history. As overviewed at the beginning of this article, the DJIA dropped below 10,000 on September 6th of last year and started to accelerate downward....THEN THE TERROR OF 9/11 OCCURRED. The stock market subsequently plunged to a low just above Dow 8000 by late-September.

Thus, the spate of mass fear associated with the DJIA's decisive drop below the key 10,000 mark last Autumn took the form of the unprecedented and devastating September 11th terrorist attacks against the World Trade Center and Pentagon that cost thousands of American lives and permanently and symbolically altered the skyline of New York City, the capital of world capitalism. This was a dramatic example of what the coming collapse of Western confidence could involve as the Grand Supercycle reversal takes full hold.

The DJIA managed to completely recover the losses incurred in September of last year and reached some three percent above 10,000 during the first couple of weeks of 2002. Since then, however, the stock market has again reversed course and another decisive break below 10,000 appears to be underway. Likewise, the Nasdaq Composite has been retesting the psychologically important 2,000 mark and is starting to break below that key level.

Given that this is likely a Grand Supercycle top in U.S. stock prices as mentioned above, it is clear that the approaching collapse in the market and mass mood will be historically unprecedented. This implies that one should now expect some of the most negative events in world history. As explained extensively in my other articles, it is possible that God has given me insight into the sort of world events one might expect. In a nutshell, we may be looking at the fulfillment of Biblical prophecies of the Apocalypse.