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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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