Harmonic Projections—The Year 2025

It’s the year 2025 and the Dow Jones Industrial Average is trading at 36,000! Am I kidding? Partially. However, the analogous prediction of Frost and Prechter’s decade forecast related to current levels would equate to over a 300% gain or a Dow Jones Industrial Average reading of approximately 25,000 points from current levels of 10,000. Although the relative market position is different than that of the early 1980s when Frost and Prechter made their historic prediction, such long-term forecasts must be based upon cogent measurement tools and thorough technical reasoning. I am not making a prediction that this will occur. Rather, I am merely speculating along the same lines as the Prechter forecast.

In that vein, I present a similar analysis within the context of the Harmonic Trading approach. Historically, the markets have responded to long-term technical levels as defined by respective substantial harmonic retracement and projection ratios of prior price history. The incredibly harmonic long-term price action in both the bear market of 2000 and 2008 exemplified the ability of these measurements to provide an effective framework of critical technical levels to consider.