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With the focus on 9-11, it is hard to remember what year the terrorist events took place.
That was in 2001, which the above chart shows as it relates to the Dow Jones Industrial
Average.
In early March, an ugly double bottom
occurred which confirmed in a few days as price climbed above the peak between the two valleys.
Price moved up in a sweeping turn, culminating in a new calendar year high for the Dow. From
there, it was downhill until July when a descending
triangle chart pattern appeared. The breakout from that was downward, and less than
two weeks later, the terrorists struck.
The markets never opened on 9/11 nor the next day. In fact, they were closed until 9/17.
When the markets finished trading that day (9/17), the Dow was down 7%, or 685 points from the
prior close. It got worse. Measured from
the close on 9/10, price bottomed 17% lower on 9/21. But after that, it was up and away.
Price formed a broadening top chart
pattern during October and into November. A
partial decline at point B points the way to an upward breakout.
For my own account, I feel fortunate. I sold Alaska Air Group (ALK) on 9/6, just days before
the terrorists dropped price of the stock by 45%. And my brother left a meeting on floor 102 of
the twin towers the day before the attack. Many of the people he met with are dead.
The Standard and Poor's 500 Index shows a similar tale. The same ugly double bottom appears
in March. Price dropped after 9/11 but it was already trending down by then. The
V-shaped chart
pattern is remarkable for its sharpness. Price dropped in a straight-line run and then shot
back up in a straight-line run until October. There it formed a
broadening formation,
right-angled and ascending chart pattern. After that, price made a
broadening top chart pattern, which led into the new year.
The last chart shows the Nasdaq composite on the daily scale. The chart is somewhat different
from the others. Price from A to B
forms a gentle rounding top, which
is itself composed of a complex head-and-shoulders
top. At
C, price stages a breakout but it lasts for just one day.
Price tries to move higher but gives up and makes its way lower to 9/11.
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