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The SureFireThing Camarilla Equation and the Great Crash of 1929

After reading our day trading guide, people often ask how far back the SureFireThing Camarilla Equation has been tested. The answer might surprise you!

October 24, 1929. On this black day, prices fell so far as to wipe out an entire year's gains. Over the next 2 weeks, more than $30 billion effectively disappeared from the US economy. Some stocks took twenty-five years or more to recover.

Interestingly, the SureFireThing Camarilla Equation had the Crash pegged. Let's look at the prediction from the day before, using SureFireThing's Camarilla Equation Calculator.

Here are the Open, High, Low and Settlement for the Dow Jones Industrial Average, either side of the Crash..

 

Date Open High Low Close
21st Oct
323.9
328.3
314.6
320.9
22nd Oct
322.0
333.0
322.0
326.5
23rd Oct
326.5
329.9
303.8
305.9
24th Oct
305.9
312.8
272.3
299.5
25th Oct
299.5
306.0
295.6
301.2
28th Oct
295.2
295.2
256.8
260.6
29th Oct
252.4
252.4
212.3
230.0
 

So how did SureFireThing's Camarilla Equation perform???!!!

 

2 DAYS BEFORE THE GREAT CRASH

According to SureFireThing's Camarilla Equation Calculator, the H3 level was just under 325, with a 'breakout' H4 level above it of 328 and change. A LONG would have been triggered at the H4 level, giving a maximum profit potential of almost 5 points, had anyone known about the equation then!
 

DAY BEFORE THE GREAT CRASH

The day before the great crash, the H3 level was calculated as 329 and a half, with the H4 above it at 332 plus change. A SHORT was triggered going back down thru the H3 level, giving a maximum profit potential of almost 26 points, an INCREDIBLY large win for just one day!

DAY OF THE GREAT CRASH

The higher H3 level was calculated as about 313. The high of the day was 312.8, meaning the equation missed the high by only 10ths of a point. As the market crashed, it hit the 'breakout' lower L4 level at just under 299, giving a ride down to the low of the day, for a maximum profit potential of over 26 points. In just 2 days, the SureFireThing Camarilla Equation picked off over 50 points, equivalent to approximately 17% of the entire index!

DAY AFTER THE GREAT CRASH

The market meandered uneasily within the L3 and H3 levels, and no trades were triggered.

4 DAYS AFTER THE GREAT CRASH

The lower L3 was calculated by SureFireThing's Camarilla Equation Calculator as just over 298. L4 beneath it was close to 295. This gave a maximum profit potential as the market reversed back up thru L3 of over 5 points, a respectable gain for the day.

5 DAYS AFTER THE GREAT CRASH

The Calculator gave just shy of 297 as the lower L3 level, with almost 295 below it as the L4 level. In this instance it became the 'breakout' level, leading to a maximum profit potential of 38 points.

In total, in just 6 short days, 99.95 points were available, that's almost a third of the entire index! The Equation expresses an internal aspect of the market's workings, and has been an incredibly accurate tool for most of the last century. What's more, this stock trading system works just as well today as it did way back in those long-forgotten times of the Great Crash.