Many experienced traders and investors know that it is extremely important to follow some of the major stock market anniversary dates from the past. Just as people follow a birthday, wedding anniversary, holiday, a death, or even a divorce, the stock market can be viewed in a similar fashion. With all of the special dates we remember in our lives, specific time periods in the stock market will often repeat or reoccur from time to time as well.
It seems the subconscious mind senses when these dates will come into play in the future. This is called vibration. For example, if I forgot my wedding anniversary my wife would likely be very upset and not very pleased with me. As you could imagine, she would most likely pout or even become very angry. In other words, it would be in my best interest to remember this important date. Remember the old saying, happy wife, happy life. So I make it a point to not forget this important date in my life. You will see how this clearly correlates with the market in a moment.
October 19 (Think 1987)
Consider this example, if the stock market is in a daily chart downtrend and there is an important anniversary coming up, the market could react in a similar fashion to a previous encounter of the same factors. Recently, on October 19, 2012 there was a 25-year anniversary date from the 1987 stock market crash. During the October 19, 1987 crash, the Dow Jones Industrial Average (DJIA) traded lower by 508.0 points, making the decline one of the largest single day percentage declines ever. In other words, real panic had reached Wall Street. Fast forward to the anniversary of this date, on October 19, 2012 the stock market sold off with the Dow Jones Industrial Average (DJIA) finishing lower by 202.33 points on the trading session. While the stock market did not exactly repeat what it did in the past, it still had a very similar reaction by selling off sharply lower on the trading day.
In 2007 and in 2008 there were numerous anniversary dates that came into play during those years. As we all know, 2007 marked a pivot top (decline) for the stock market. Many of the anniversary dates reflected a very bearish outlook at that time, which almost all played out as expected. For example, look at the trading action that took place on October 19, 2007. The stock market plunged lower on that day with the DJIA losing 366.0 points on the trading session. In this example, you can see how a very similar result occurred on the anniversary of the October 19, 1987 trading day. There are many more dates in trading history that I can easily point to, however, I will leave that investigative work up to you.
Pivot Dates
Many of you are probably asking why this occurs, others are probably saying thatit's just coincidence. If anything is clear, it is that when looking back at history, price action speaks for itself. During these pivotal anniversary time periods the markets have most often reacted, therefore, it is always good to know some of the important pivot anniversary dates from the past. Remember what the American author and humorist Mark Twain used to say, "history does not exactly repeat itself, but it often rhymes." In these anniversary examples that I have shown you, from October 19, 2007, and 2012 you can certainly see how history indeed does rhyme. Sure, there is always more to simply finding an anniversary date, it is called the time factor, however, I shall leave that for a future article.