Skip to comments.How To Deal With The Scary 1929 Parallel Chart
Posted on 02/20/2014 12:01:40 AM PST by waus
There are eerie parallels between the stock market's recent behavior and how it behaved right before the 1929 crash. That at least is the conclusion reached by a frightening chart that has been making the rounds on Wall Street. The chart superimposes the market's recent performance on top of a plot of its gyrations in 1928 and 1929. The picture isn't pretty. And it's not as easy as you might think to wriggle out from underneath the bearish significance of this chart.
(Excerpt) Read more at seekingalpha.com ...
I will point this out from recent weeks....George Soros....always the manipulator of countries and stocks....has waged a “put” on the S&P 500...of roughly $1.4 billion. That in effect says....he’s betting on a fairly good spiral downward between now and the end of 2014.
If this was a simple $50 or $100 million gamble...it wouldn’t say much. But it’s a fair sum of money. How much is Soros worth? Around twenty billion (at least it’s believed to be that much).
I believe at the right point where things fall into place...the remaining nineteen billion will be pulled and sat on for weeks and months. Soros has manipulated markets before, and taken huge profits. I believe this 1929 parallel chart business goes hand-in-hand with his strategy.
I should also point this out...days before the 1929 market collapse....several investors took their profits and walked away from the stock market. This triggered a minor drop or two in the day or two leading up to the collapse. No one talks names or identifies what the strategy was at the time....and it was never reported because of naive reporters on the topic of finance.
He owns the “Jakarta Street Kid” in the White House. What do you think now?
So what can a 401k investor do at this point? Buy SP500 PUT options?
Yes, that’s a good idea...or, just about any other stock.
If the current situation tracks the 1929 chart, then, this drop is going to be dramatic and relatively fast, which is a fabulous scenario for an option buyer. Fortunes will be made over the next two months.
I don’t see any reason why the charts would stop their symmetrical pattern now.
Today I bought AAPL BA and SBUX Feb 28 weekly puts.
AAPL is a beautiful example of an excellent put play.
Dropped big in January, became oversold, ran up to overbought with a lower high than January and had a hanging top (not sure of the correct doji name) on 2-18, reversed yesterday and is already down 7 in the first 20 minutes today....timmmmmmmbbbberrrrrrrrr....let the games and fun begin.
Bonus: I sleep better at night....lots better.
The great thing about fast moving markets to the downside is that you can start with $100-200 dollars, buy put options a week or two weeks out and make a significant amount of money to parlay into other puts later.
My total investment in those puts is about 200, but, if things work out right, then, next week I could have thousands. If not, for me, it was worth the chance.
Doesn’t take much to get the train rolling down the track.
Otherwise, cash is definitely the place to be now.
Just asking - what about Janet Yellen putting her monetary pedal to the metal?
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