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What these stock index charts in 2007 tell us about market tops

3 major lessons to learn from chart history

  1. 10-20% correction follows market tops.
  2. Rallies happen in a downtrend.
  3. Market corrects slowly at first and then very quickly.
Dow Jones Industrial Average Weekly Chart, Apr 2007 - Dec 2008

Dow Jones Industrial Average Weekly Chart, Apr 2007 – Dec 2008

Hang Seng Index Weekly Chart, Apr 2007 - Dec 2008

Hang Seng Index Weekly Chart, Apr 2007 – Dec 2008

Straits Times Index Weekly Chart, Apr 2007 - Dec 2008

Straits Times Index Weekly Chart, Apr 2007 – Dec 2008

There is a saying that “history does not repeat but it rhymes“. As long as investors operate with greed and fear, markets will behave in the same way.

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Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.

“Dear reader, I do not have a financial license to give advice. I do not know you the reader. Your financial objective and risk tolerance may be different from mine. I am not responsible for any consequence of your action.

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