DOW 14,000 & THE CRASH?

By J. Adams
October 3rd, 2007
The Spirit Of Truth Page

Over the past few days, the Dow Jones Industrial Average climbed to a new all-time closing high above 14,000 and then reversed back below the psychologically significant benchmark:

Unlike the first top at Dow 14,000 in July, this time around the peak in the Industrials was not confirmed by the Utilities and Transports, something you'd expect to see at the final top according to Dow Theory. As can be seen below, the Utilities peaked back in May and the Transports peaked in July:

As I have pointed out time and time and time and time again, when the DJIA reverses from key thousand marks it is often associated with negative historical shocks.

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

For instance, on September 6th of 2001, the DJIA dropped decisively below the 10,000 mark and the Dow Jones Composite index broke below 3000, THEN September 11th occurred driving the market down sharply.

Thus, when the DJIA reversed decisively from 10,000 in September of 2001, the breakdown in Western confidence manifested as the literal collapse of a key symbol of Western financial prowess and American global economic hegemony....the World Trade Center towers in New York City. Likewise, a blow occurred against the Pentagon in Washington DC, the symbol of American global military hegemony.

There are other major examples of significant negative historical events erupting in conjunction with reversals from key thousand marks in the DJIA.

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.

Given the historical pattern of major stock market reversals from key thousand marks in the DJIA, there is reason to believe that a new reversal from Dow 14000 will be associated with a major decline in stock prices possibly triggered by some sort of historical "shock(s)" like occurred with such breaks in the past.

- THE CURRENT JUNCTURE -

It is important to note that, according to long-term cyclical analysis, at the current juncture the stock market may have just reached a "Grand Supercycle Top" more than 200 years in the making and is now turning down into a Grand Supercycle crash which entails the collapse of Western Civilization. What shape will this collapse take?

That a stock market crash might occur in the weeks or months ahead suggests that something could occur that will upset investor's expectations. In other words, should a financial panic occur on Wall Street, it will likely be part of a worldwide wave of mass fear. The question is, what will precipitate such a global panic?

I have been warning for 15 years that the Elliott Wave Grand Supercycle crash, which entails an ultimate upset of the West's high expectations for the future, will ultimately take the form of World War Three starting with a conflict in the Middle East. This is literally the prophetic "Apocalypse". In February of 1991, I experienced a prophetic vision detailing how news of the war will begin, i.e., with a special report of a missile attack on Israel involving weapons of mass destruction (possibly triggered by Israeli and/or U.S. air strikes against Iran and/or Syria?). From there, events will deteriorate into a full-scale global nuclear war.