Armstrong Economics

W i l l the Dow Reach

30,000 by 2015?
2007.15

Copyright Martin A. Armstrong A l l Rights Reserved

August 14th, 2009
Comments Welcome: ArmstrongEconomics@GMailCOM ( I n t e r n a t i o n a l l y )

A C K N O W L E D G E M E N T S
I would l i k e t o thank the many p e o p l e who have
been w r i t i n g from a r o u n d t h e w o r l d . I t i s e n c o u r a g i n g
to know t h a t t h e r e a r e so many p e o p l e who a r e i n t e r e s t e d
i n u n c o v e r i n g t h e t r u t h . I have a l s o s p e c i a l thanks f o r
so many p r o v i d i n g v a l u a b l e i n s i g h t i n t o t r e n d s a r o u n d
t h e w o r l d from C h i n a , S o v i e t R e p u b l i c s , S o u t h A f r i c a ,
B r a z i l , A u s t r a l i a n , and I n d i a . I b e l i e v e we c a n s u r v i v e
t h e f o l l y o f governments even i f t h e y r e f u s e t o l i s t e n .
The key i s u n d e r s t a n d i n g t h e n a t u r e o f e v e n t s , and t h a t
a l l o w s us t o c o r r e c t l y make t h e d e c i s i o n t o be on t h e
opposite side.
I w o u l d l i k e t o a l s o thank a l l my o l d f r i e n d and
f o r m e r c l i e n t s f o r t h e i r s u p p o r t and t o know t h a t t h e y
have c o n t i n u e d t o g a t h e r i n f o r m a t i o n t h a t s e r v e s us a l l
i n times of c r i s i s .
We a r e s t a n d i n g on t h e p r e c i p i c e o f a new e r a i n
g l o b a l - s o c i a l - e c o n o m i c s . How we e n t e r t h i s new age i s
of c r i t i c a l i m p o r t a n c e . Government i s i n c a p a b l e t o d o i n g
a n y t h i n g f o r any reform, o f i t s own abuse o f power i s n o t
up f o r n e g o t i a t i o n . We must weather t h e s t o r m , and t o do
so we n e e d t o u n d e r s t a n d i t s n a t u r e . J u s t as t h e 1930s
G r e a t D e p r e s s i o n s e t i n m o t i o n p r o f o u n d c h a n g e s t h a t were
even m a n i f e s t i n g e o p o l i t i c a l c o n f r o n t a t i o n s , we have now
r e a c h e d s u c h a c r o s s r o a d s . A d e b t c r i s i s has i t s t e n t a c l e s
d e e p l y embedded i n t o e v e r y s e c t o r r i g h t i n t o government.
T h i s i s t h e d i s t i n c t i o n from a mere s t o c k m a r k e t c r a s h t h a t
n e v e r a l t e r s t h e economy l o n g - t e r m . We a r e s e r i o u s l y s t i l l
o v e r - l e v e r a g e d and some banks a r e s t i l l t r y i n g t o be hedge
f u n d s and have t o s p e c u l a t e t o make a p r o f i t . T h a t i s a key
w a r n i n g s i g n t h a t t h e worse i s y e t t o come.

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<^x^ \\

W i l l the Dow

2015

75

Reach

30,000 by 2015?

X>

ur c y c l i c a l journey through time has given us an explanation that the

Economic Confidence Model i s a g l o b a l model and what peaks p r e c i s e l y w i t h
i t i s what one could c a l l the "hot money." In r e a l i t i t y , t h i s i s the
. concentration of c a p i t a l i n t o a p a r t i c u l a r nation, sector, and even down
i n t o the i n d i v i d u a l l e v e l . The Marxists are t a r g e t i n g the " r i c h " and
know not what they are doing. I t i s l i k e d i s c o v e r i n g there i s a noise i n
your chest (the beat of your heart) and they t h i n k i t should be s i l e n t .
A p a r t i c u l a r s e c t o r becomes a t t r a c t i v e t o c a p i t a l . I t a c t s l i k e a magnet drawing i t
i n from around the world. As t h i s sector becomes the focus of the c a p i t a l concentration
we end up with the r e s u l t of booms and busts as w e l l as progress and innovation. This
i s the very essence of economic l i f e . Yet at the same time, there i s t h i s constant
o s c i l l a t i o n between Public and Private Confidence. This i s described i n times of
economic c r i s i s as the "flight to quality" but we must respect, i t i s not a one-way
s t r e e t . When c a p i t a l becomes frightened a f t e r a speculative bubble i n the p r i v a t e
sector, i t rushes t o the p u b l i c sector bonds. But when the source of that d e c l i n e i n
confidence l i e s w i t h i n the public sector, then the c a p i t a l flow i s reversed
and the "flight to quality" i s the t a n g i b l e assets i n the p r i v a t e world. What we are
looking at i s a c o l l a p s e i n Public Confidence that i s going t o m a t e r i a l i z e i n t o a
new "bull market" t h a t w i l l see the Dow Jones I n d u s t r i a l s r i s e t o perhaps even the
30,000 l e v e l going i n t o October 1st, 2015.
Now l e t us take t h i s t o the next l e v e l .
As I have p r e v i o u s l y explained, each and
every market has i t s own d i s t i n c t and very
unique c y c l i c a l frequency. So what does not
peak with the Economic Confidence Model w i l l
f o l l o w the beat of i t s own drums.

This I s a l s o the Grand U n i f i e d Theory

of a l l c y c l i c a l movement. I t i s the very
essence of how energy i t s e l f i s transported
and transformed. As i t moves through s o c i e t y
c r e a t i n g booms and busts, a l l we can do i s
understand how, why, and when such movements
w i l l take place.

Nevertheless, each i n d i v i d u a l market

w i l l a l s o d i s p l a y an underlying current
w i t h i n . J u s t l i k e the water at the beach
where the energy f l o w i n g through the water
c r e a t i n g the c y c l i c a l wave motion may be
moving east t o west, there i s s t i l l the curr e n t w i t h i n the water t h a t may be moving
north t o south. These two actions are i n
f a c t moving a t 90 angles t o each other.
The one r u l e to always remember, what holds
t r u e i n the p h y s i c a l world must hold true i n
the world of human-interaction that i s our
social-political-economy. The laws of the
science of physics a p p l i e s t o a l l things
i n c l u d i n g how we even i n t e r a c t w i t h each
other.

I have explained the v o l a t i l i t y c y c l e

of 72 years. The same numbers w i l l reappear
time and time again a t a l l d i f f e r e n t l e v e l s
i n our observation. I f we take 8.6 months
and d i v i d e that by 12 months t o obtain the
percentage t h i s represents of one year, we
end up again with 72% (rounded).
What I am about t o i l l u s t r a t e i s that
the proof of t h i s 8.615 c y c l i c a l frequency
t h a t when measured i n years equals P i (3.14)
times 1,000 i n days, i s that i t appears i n
everything around us even when we may not
be looking f o r i t . This proves i t s f r a c t a l
nature, and thus i t i s the key t o a l l c y c l e s .
1

Economic Confidence Model

Gopy/ffl/f/By

Martin A. Armstrong

S i x Waves, o f Ml -Gyr.
cun-Mne l o form

Further proof t h a t there i s a hidden

world of time i s a l s o demonstrated by the
f a c t that we saw a 17.2 month d e c l i n e i n
i n t e r e s t rates from the June 2007 high.
What we have i s the same frequency showing
up i n d i f f e r e n t mediums that possess t h e i r
own unique frequencies i n normal times.
The emergence o f the 8.6 frequency i n
a wide v a r i e t y of mediums i s i n d i c a t i v e of
major events. L i k e the ocean, there are j u s t
periods where the wind i s calm and the waves
i n the water almost do not e x i s t . This i s
when the current w i t h i n the water becomes
the dominate mover and shaker.
There i s a c y c l e t o everything r i g h t
down to your moods. When we look out at the
world, what we see i s a complex i n t e r a c t i o n
o f forces that are c l a s h i n g l i k e t i t o n s of
old. Perhaps the Greeks a s c r i b e d t o gods
these forces they observed and a t t r i b u t e d
them t o actions of beings.
We are d e a l i n g w i t h the complexity of
l i f e i t s e l f . Darwin observed from h i s own
e m p i r i c a l e x p l o r a t i o n , t h a t emerged i n t o
h i s theory of e v o l u t i o n . Today, we have
discovered what he could not see - DNA. We
can now take that DNA code and t r a c k the
s i m i l a r i t i e s and e v o l u t i o n . Those who only
see e v i l i n such things as being contrary t o
r e l i g i o n and the B i b l e , overlook a simple
f a c t . This i s what can be proven. I t does
not mean that God d i d not decide t o take a
monkey and transform him i n t o a man. The two
p o s s i b i l i t i e s cannot be mutually e x c l u s i v e
i n s o f a r as science and r e l i g i o n .

~The: S-Jfiyr Wave""b r e a k s

/down' I n t o 3. i n d i v i d u a l :
"alloir-latin;} w a v e s .iwiilv
a limi; d u r a t i o n of
z.15
a n d l.tJ/5 y e a r p e r i o d s .
Jbr' :t V.1 eg.-. WeV refe. r''.!*;:
t h e s e - a s - a-:?long"f and
"short" legs
:

What I hope t o r e v e a l i s a dynamic and

new world of i n t e r a c t i o n . I f we can climb t h i s
exchelon of complexity, we can reach a new
understanding and progress beyond the world
of b i a s and prejudice not t o mention the many
superstitions.
I f we can understand the world of complex
i n t e r a c t i o n , we w i l l end the witch-hunts and
stop the quest t o blame someone f o r what our
own government does every time - destory our
f u t u r e by s e l f - i n t e r e s t , c o r r u p t i o n , and f e a r
of a l o s s o f power.
I f we e x i s t e d when the dinosaurs ran
around, no doubt we would be blaming that on
someone a l s o . We t r y t o pretend we can even
i d e n t i f y a s i n g l e source and then t e l l the
world we have c r i m i n a l l y thrown them i n j a i l
and the economy i s back t o normal. Nonsense!
We are e i t h e r going t o graduate t o the
next l e v e l of existence or we w i l l stay i n
our p r i m i t i v e p r i m o r d i a l ways of blaming a l l
events on man as i f we have the power t o i n
f a c t move the world l i k e the Greeks believed
i n t h e i r gods were mischievous creatures who
j u s t enjoyed messing w i t h the plans of men.
Today, we prosecute everyone and conjure up
w i l d theories t o make i t sound good that are
no more t r u t h f u l , than anyone e l s e i n t h i s
primitive primordial h i s t o r i c a l state. Just
as the Commodity Futures Trading Commission
accused me of manipulating the world economy,
t h i s i l l u s t r a t e s my p o i n t . We might as w e l l
s t i l l be s a c r i f i c i n g v i r g i n s and praying to
Neptune t o make the waves smaller.

We cannot r i s e t o the next l e v e l u n t i l

we abandon these s t u p i d presumptions. We can
I f DNA i s the b l u e p r i n t on how t o make
copies of a species t o perpetuate l i f e i t s e l f no more c o n t r o l the world economy even as a
nation, than we can the weather. The system
i n a l l forms, then perhaps c y c l e s are the
i s so complex, we cannot see i f we refuse t o
equivalent DNA i n how a l l l i f e i n t e r a c t s .
open our eyes. There i s a dynamic world
Moving from one l e v e l i n time t o the next
waiting f o r us i f we stop the arrogance
i s mapping a f r a c t a l world of complexity.
that we are as almighty as the Greek gods.

Capital Flow

I t i s c l e a r t h a t the economy peaked i n

February 2007 w i t h the Economic Confidence
Model f o r that i s where the housing market
indexes reached t h e i r z e n i t h . The stock
market crashed b r i e f l y p r e c i s e l y to the day of
the model, but then r a l l i e d l a t e r i n the
year showing t h a t the concentration of the
c a p i t a l was squarely w i t h i n the debt markets
and not stocks.
Interest r a t e s rose i n t o June showing
the hidden core was a debt problem. This was
the f i r s t r e s u l t of the February high i n the
economy with the model. As debt problems
began to emerge, t h i s s i g n a l l e d that there
was trouble l y i n g beneath the surface. Many
needed cash and t h i s s t a r t e d t o force r a t e s
higher i n t o June given a c l e a r
warning o f
what was to come.
The Dow Jones I n d u s t r i a l s r a l l i e d i n t o
October 11th, 2007 before reaching i t s high.
Keep i n mind, t h a t stocks have i n normal
conditions been the competing investment f o r
f i x e d income. Therefore, cash w i l l a t f i r s t
f l e e from debt t o stocks and t h i s then had
created the next r e s u l t - the Dow peak.
Unfortunately, the m a j o r i t y do not even
understand that c a p i t a l flows, no l e s s how.
The flow of c a p i t a l can be tracked throughout time and j u s t as i t concentrates i n t o
one sector and n a t i o n , we must understand
what happens when t h a t concentration begins
to reverse. The r i s e i n stocks a f t e r the
economy peaked i s a normal r e s u l t of how the
c a p i t a l flows l i k e water through our s o c i a l
p o l i t i c i a l - e c o n o m y . The f i r s t r e a c t i o n i s
to f l e e f i x e d income and move to equity.
This i s the t y p i c a l flow of c a p i t a l i n a
debt c r i s i s . I t i s reversed i n a speculative
bubble i n stocks where c a p i t a l f l e e s t o the
bonds.

I l l u s t r a t e d above i s an overlay of the

Economic Confidence Model with behind i t we
f i n d the two i n d i v i d u a l markets of equity
and i n t e r e s t r a t e s . Not everything peaks a t
the same time. For every a c t i o n i n the f i r s t
g l o b a l model, there becomes an equal and
opposite r e a c t i o n that r i p p l e s down the l i n e .
The peak i n the housing market, set i n
motion a c o n t r a c t i o n i n c a p i t a l that caused
the r a l l y i n i n t e r e s t rates i n t o June 2007,
that was then followed by the i n i t i a l rush
from f i x e d income to equity c r e a t i n g the new
Dow highs i n October 2007.
The low i n i n t e r e s t rates thus took
place i n 17.2 months (2 x 8.6 months) from
the June high of 2007. As the f l i g h t t o so
c a l l e d q u a l i t y ended, the next to bottom i n
March was the equity market 17.2 months from
i t s high i n 2007 (2 x 8.6 months).
These are the n a t u r a l consequences of
how c a p i t a l w i l l flow i n t o a sector and then
depart. What we are looking at on the very
broader term, i s t h a t the Dow w i l l r i s e and
and reach a new record high as we see the
reverse continue to unfold. In other words,
the f l i g h t t o q u a l i t y now w i l l be the f l i g h t
from government debt back t o p r i v a t e sector
equity rather than debt. This should then
m a t e r i a l i z e a major high i n the Dow that w i l l
therefore be followed by a r i s e i n i n t e r e s t
rates s e t t i n g the stage thereafter f o r the
next new dawn of a c y c l i c a l trend.
These events take place i n slow-motion
when we look a t them from the long-term view
on an annual b a s i s - not d a i l y noise. The
Free Markets arg^never wrong f o r they show
you what w i l l unfold i n slow-motion.

Capital Flow Analysis

(1) C a p i t a l flows among nations d r i v i n g currency values higher and lower
j u s t as mankind migrated spreading out around the whole globe. C a p i t a l
responds i n the same way looking f o r the greener grass
(2) C a p i t a l flows even w i t h i n a n a t i o n between sectors c r e a t i n g the boom
bust c y c l e .
(3) C a p i t a l flows t o the movers & shakers of innovation on an i n d i v i d u a l
basis and t h e i r excess c a p i t a l i s put back i n t o the g l o b a l pond and then
beccmes a v a i l a b l e f o r someone e l s e t o create a new wave of innovation

a p t i a l flow a n a l y s i s i s something I have developed from observation and

working w i t h the movers & shakers around the world. In the 1980s, everyone
was i n Geneva. That was the center f o r d e a l i n g w i t h the vast hoards of
cash coming i n from OPEC. However, as o i l declined as d i d gold going i n t o
1985, the next 4.3 years was a s h i f t i n c a p i t a l flows that was s i g n a l l e d
by the f a i l u r e of the Japanese yen t o c o r r e l a t e i n 1985. The yen, u n l i k e
other currencies, bottomed i n 1982 - not 1985. The huge popular trade back then was
the Deutsche mark/Japanese yen spread. Suddenly, that spread began t o reverse and
the mark was now headed t o new record lows n e a r l y 4 t o the d o l l a r going i n t o 1985.
The yen, h e l d i t s ground.
One of the primary lessons of my many
years of observing, has been that ^fogolutely
nothing takes place without reason and a
very clear purpose. J u s t as E i n s t e i n had
d i f f i c u l t y b e l i e v i n g t h a t anything could
be purely random and t h a t God was p l a y i n g
dice w i t h the universe, the same i s true i n
everyiiiing I have ever observed.

J u s t l i k e the t a l k i n g heads on TV who t r y

to provide the d e f i n i t i v e explanation each
day how the market's movement i n a s i n g l e and
d i s t i n c t fundamental explanation, r e a l i t y i s
never what they b e l i e v e , i f they b e l i e v e what
they are even saying. Government does the very
same t h i n g , and i t seems t o me they d e l i g h t i n
t h e i r own applause f o r being so smart.

J u s t because we may see something that

i s strange and makes no sense a t that b r i e f
moment i n time, i t does not mean that we
should ignore i t . The Free Markets are just
never wrongl P o l i t i c i a n s w i l l disagree as
w i l l Marxists, because they d e s i r e the true
power t o manipulate the economy. Neverthel e s s , i t i s b u l l s h i t t o b e l i e v e i n such an
arrogant p o s i t i o n . We can no more c o n t r o l
events than prevent death p e r p e t u a l l y .

This i s a f a r too complex system of i n t e r a c t i o n s on a g l o b a l s c a l e t o reduce the cause

t o a 60 second or l e s s sound-bite. We are i n
a l l honesty preventing our own evolution f o r
we are trapped i n t h i s world where the c l e a r
m a j o r i t y b e l i e v e the world i s f l a t . May be i t
w i l l take a c o l l a p s e of such devastation t o
u n f o l d before we wise up and r e a l i z e we j u s t
got i t a l l wrong.
Every s u b t l e move i s f o r a purpose. The
f a c t that the yen d i d not make new lows i n
1985, set the stage f o r the minimum r e a l b u l l
market that r e q u i r e s 7 years minimum. This
i s why the 1982 low h e l d and 1985 was a r e t e s t
w i t h the r a l l y i n t o the bubble top f o r 1989.
The Pattern A n a l y s i s projected c o r r e c t l y . The
i n d i v i d u a l c y c l i c a l timing models on Japan
were a l s o l i n e d up w i t h 1989. And above a l l ,
the 1989 December high l i n e d up w i t h the
Economic Confidence Model 1989.95. This was
now a foreseeable event horizon i n Japan.

The f a c t that the yen bottomed i n the

1982 c y c l e event, s e t the stage f o r a c l e a r
7 year b u l l market going i n t o the bubble
top f o r 1989. A l l other currencies bottomed
i n 1985, rose i n t o 1987, created a crash
p r e c i s e l y t o the day of the model October
19th, 1987, but t h i s was a l l c a p i t a l flows
pouring out of the United States and even
Europe headed on a journey to flow t o the
new hotest market i n the world - Japan!
4

THE FLIGHT TO grjALTTY MAYBE OVER

DOW JONES INDUSTRIALS

We can see from the above two charts

t h a t the f l i g h t t o q u a l i t y and the Dow Jones
both reached t h e i r lows i n 17.2 months - a
key timing i n t e r v a l o f twice the 8.6 month
frequency. The Dow Jones I n d u s t r i a l s f e l l
i n t o March 2009. This was f o l l o w i n g a s w i f t
w a t e r f a l l e f f e c t i n s o f a r as there was no
r e a c t i o n r a l l y - j u s t a meltdown.
Looking a t the Dow Jones I n d u s t r i a l s ,
i f we project p r e c i s e l y from the Oct 11th,
2007 high, 17.2 months t o the day gives us
March 19th, 2009. The p r e c i s e low on an
intraday basis was March 6th a t 6,470. The
lowest c l o s e took place the next week on
Monday March 9th. The i d e a l target o f the
19th was 8.6 t r a d i n g days l a t e r .
This demonstrates t h a t aside from the
i n d i v i d u a l c y c l i c a l frequencies w i t h i n the
Dow Jones I n d u s t r i a l s that are d i f f e r e n t from
the NASDAQ 100 and the S&P 500, s t i l l there
i s t h a t unique signature frequency o f 8.6
that moves through everything and a t times

i s a t a 90 angle t o the core inherent natural

frequency w i t h i n the i n d i v i d u a l market that
we are observing. L i k e water, t h i s i s the
hidden current under the surface that i s being
e f f e c t e d by the wind f o r c i n g energy t o flow
a t the surface contrary t o the underlying
current hidden beneath.

Therefore, c y c l i c a l complexity runs very

deep indeed. To see i t a l l , we need computers
t o peal back the l a y e r s both i n time, and i n
the a c t u a l a c t i v i t y . There i s a vast new world
that i s w a i t i n g to be explored, i f we understand i t even e x i s t s . The f a c t that the Dow
reached t h i s March low i n 17.2 months i s a
window i n t o the existence o f a world we should
not ignore.

I f i n d i t curious t h a t when the CIA

contacted Princeton Economics, they even
admitted that they recognized that I had
invented c a p i t a l flow a n a l y s i s and wanted
ms t o b u i l d a model i n Washington. When I
d e c l i n e d , the s t a f f b e l i e v e t h a t was the
reason f o r the a s s a u l t on the company and
me personally. Perhaps, but I am not sure
they were the source. They may have been
i n s t i g a t e d by others, but t h a t source was
New York Investment Banks who saw the model
as a threat because they could not trade
against i t , and we were educating t h e i r
ususal prey.
Nevertheless, the CIA recognized that
the f a t e o f nations could be predicted by
c a p i t a l flow a n a l y s i s . When the model had
accurately p r e d i c t e d the change i n trend i n
China and i n 1998 I gave a l e c t u r e i n the
C i t y o f London t h a t was reported i n the
London F i n a n c i a l Times t h a t summer that
our model p r e d i c t e d the c o l l a p s e i n Russia
i n about 30 days, which unfolded t h a t Sept
m a t e r i a l i z i n g i n the Long-Term C a p i t a l Management c o l l a p s e and contagion, they then
and there r e a l i z e d the importance o f t h i s
type o f model.
At the court hearing o f October 3rd,
2000, the SEC and CFTC demanded along with
the receiver that the I n s t i t u t e be shut down
and when s t a f f showed up w i t h w r i t t e n l e t t e r s
requesting from the Department o f Energy t o
construct a model f o r them because we had
a l s o forecast when o i l h i t $10 that i t would
r i s e t o the $100 l e v e l going i n t o 2007. The
Commodity Futures Trading Commission was
i n s t i g a t e d by the New York Investment Banks
to shut the model down a t a l l c o s t s . They
demanded the court c l o s e the I n s t i t u t e and
ignore other agencies requesting help. They
won.
The SEC and CFTC saw Princeton as the
threat because they d i d not understand any
model. To them, anything t h a t could do such
things i s proof o f being too i n f l u e n t i a l
and thus evidence o f manipulating the world
economy. They want t o keep the p u b l i c dumb
so the New York Investment Bankers can feed
on them t o earn p r o p r i e t a r y t r a d i n g with
absolute immunity f o r whatever they do. This
i s the sad s t a t e o f the c o r r u p t i o n i n our
so c a l l e d regulatory system. I t i s part of
the c y c l e and i s what i s causing the r e a l
c o l l a p s e i n P u b l i c Confidence. This i s the
essence o f what we face.

I suppose I w i l l be blamed f o r the f a c t

t h a t the f l i g h t t o q u a l i t y came t o an end i n
17.2 months again. They w i l l most l i k e l y a l s o
blame me f o r the demise o f the p o l i t i c a l economy that we are f a c i n g . But they have i n
f a c t f u l f i l l e d the c y c l e . Their own corruption
i s destroying our f u t u r e . This w i l l become
s e l f - e v i d e n t when the c a p i t a l flows f l e e the
government bonds and r e t u r n t o equity and
g o l d where the Dow may r a l l y i n t o 2015.75.
What Does The Future

Hold

The Free Markets are never wrong, only

those who analyze them, i n c l u d i n g myself. I f
something i s not developing as expected, i t
never be the markets, only the f a i l u r e t o
consider a l l the data impacting the market.
c a n

Consequently,- i f we step back and look at

the major trends, we can see the eventual
outcome. Just as the yen bottomed i n 1982,
a 7 year r a l l y predicted the peak i n 1989.
When o i l bottomed, an 11 year b u l l market
was p r o j e c t i n g i n t o 2007.
The major low f o r the Dow that was i n
p e r f e c t harmony with the Economic Confidence
Model was 1994.25. The low was t o the p r e c i s e
day. B u l l markets unfold i n increments o f 7,
11, and 21 i n t e r v a l s . The f i r s t timing on
t h i s P a t t e r n P r o j e c t i o n Analysis was l i n e d up
f o r 2000. This was a bubble top i n the Dot.Com
and was p r e c i s e l y 7 years from the lowest i
annual c l o s i n g i n 1993/1994 intraday. The
next target 11 years produced nothing. The
Dow r a l l i e d i n t o 13 years from the 1994 low
and that was not on the Pattern P r o j e c t i o n
A n a l y s i s g r i d . This was the c a p i t a l flow
r e s u l t from the Economic Confidence Model
peak i n February 2007 (2007.15). Since t h i s
2007 high does not conform on a l l l e v e l s and
a l l s l i c e s o f a n a l y s i s , i t cannot be a major
high. That means we must look a t the f i n a l
timing element on the Pattern P r o j e c t i o n
Analysis that brings us t o 21 years f o r the
b i g high from 1994 - 2015.
1

I n other words, the r e a l peak i n equity

i s targeted t o the next peak i n the Economic
Confidence Model 2015.75. For now, we may
see a 6 month r a l l y . The main resistance i s
11 ,000 l e v e l i n the Dow. We need a monthly
c l o s i n g above t h a t l e v e l t o s i g n a l the March
2009 low w i l l hold. Otherwise, we should
expect a r e t e s t o f the lows and s t i l l even
perhaps new lows going i n t o 31.4 months down
from the Oct 2007 high with a r a l l y i n t o the
neat target 2015.75 reaching 30,000*.