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Scary 1929 market chart gains traction
Marketwatch ^ | Feb 11, 2014 | Mark Hulbert

Posted on 02/11/2014 9:39:48 AM PST by Straight Vermonter

CHAPEL HILL, N.C. (MarketWatch) — 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.

I should know, because I quoted a number of this chart’s skeptics in a column I wrote in early December. Yet the market over the last two months has continued to more or less closely follow the 1928-29 pattern outlined in that two-months-ago chart. If this correlation continues, the market faces a particularly rough period later this month and in early March. (See chart, courtesy of Tom McClellan of the McClellan Market Report; he in turn gives credit to Tom DeMark, a noted technical analyst who is the founder and CEO of DeMark Analytics.)

(Excerpt) Read more at marketwatch.com ...


TOPICS: Business/Economy
KEYWORDS: nudgerrich

1 posted on 02/11/2014 9:39:48 AM PST by Straight Vermonter
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nudger rich

2 posted on 02/11/2014 9:41:25 AM PST by devolve ("He's just 'too talented' to do what 'ordinary people' do." "Barry of Bungle" "Homo Electus")
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To: Straight Vermonter
All we need now if for John "F-in" Kerry to come back from Iran talking about "peace in our time."

Scouts Out! Cavalry Ho!

3 posted on 02/11/2014 9:42:32 AM PST by wku man (We are the 53%! http://www.youtube.com/watch?v=YUXN0GDuLN4)
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To: wku man
if = is

Scouts Out! Cavalry Ho!

4 posted on 02/11/2014 9:43:12 AM PST by wku man (We are the 53%! http://www.youtube.com/watch?v=YUXN0GDuLN4)
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To: Straight Vermonter
That is ominous!
5 posted on 02/11/2014 9:53:55 AM PST by matthew fuller
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To: wku man

If you dig into the episode....which few historians really get into finance details....there’s this drop a day or two prior to the big drop....and it appears that a small number of individuals knew of some big calamity coming in the days ahead, and shed their accounts....walking away.

I should also point out in 1914....just after the crown prince is killed from the Hapsburg Empire.....the British stock market fell apart in just a matter of a day or two. Almost no historian will touch that story today....but for a brief time (several days)...banks across England went into holiday status, and most people expected absolute failures to occur. We never hear about that episode.

Lot of things about this era of 1900 to mid-1930s....we just seem to lack real history on or understanding. It’s funny....we know more about 1865....than 1929.


6 posted on 02/11/2014 9:56:01 AM PST by pepsionice
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To: Straight Vermonter

This is an example of how gamblers lose money when they think they found a system.


7 posted on 02/11/2014 9:58:14 AM PST by Raycpa
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To: Straight Vermonter

VERY MISLEADING!

The 1928-29 chart has a low of 200 and a high around 380. The market lost nearly half its value,

The 2014 chart has a high of 16,400 and a low of 12,400, or about 1/4 value lost, if we draw the lines in parallel.


8 posted on 02/11/2014 9:59:39 AM PST by Dr. Sivana ("We are not sluts."--Sandra Fluke)
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To: pepsionice

So true.


9 posted on 02/11/2014 10:00:04 AM PST by redgolum ("God is dead" -- Nietzsche. "Nietzsche is dead" -- God.)
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To: Straight Vermonter

That’s it! I’m cashing in my retirement funds and going off the grid.

-Jesse Ventura


10 posted on 02/11/2014 10:00:22 AM PST by Tenacious 1 (My whimsical litany of satyric prose and avarice pontification of wisdom demonstrates my concinnity.)
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To: Straight Vermonter

I’m very suspicious of ANY market advice from people who are themselves heavily invested in the market. There are people right now who stand to make a great deal of money if the market goes down. Likewise if it goes up. I’m not saying these folks always have ulterior motives, but their own investments are likely colored by their view of the market. Meaning? They personally stand to gain if their predictions come true, and there’s a greater chance of their predictions coming true if they can convince others to join them.


11 posted on 02/11/2014 10:00:27 AM PST by CitizenUSA (Sodomy and abortion: the only constitutional rights cherished by Democrats.)
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To: Straight Vermonter

I’m already out of stocks and holding cash.


12 posted on 02/11/2014 10:02:50 AM PST by taxcontrol
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To: matthew fuller

This is called historical fractal analysis (a form of technical analysis) but almost never works for predictive purposes (the congruence eventually disappears). However, I do believe the market will sink to that that 50% off clearance sale one way or another.


13 posted on 02/11/2014 10:04:18 AM PST by steve86 (Some things aren't really true but you wouldn't be half surprised if they were.)
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To: Straight Vermonter

Reminder to myself to buy lots of toilet paper before April.


14 posted on 02/11/2014 10:09:19 AM PST by VanDeKoik
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To: Dr. Sivana

Very true. A drop to 13,000 (interpolating from the chart as the bottom) would be an 18.6% drop of where we are today (15,980). Nowhere near 50% but a significant decline from today. Average market “correction” is 10%.


15 posted on 02/11/2014 10:10:06 AM PST by Wyatt's Torch
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To: Dr. Sivana

Yeh, but GLOOM DESPAIR AND AGONY gets more page hits than reality.I’ve learned to take any gloom-and-doom story, especially economic ones, with about ten tons of salt. Economic forecasts are like weather forecasts - a giant crap shoot.


16 posted on 02/11/2014 10:13:52 AM PST by arderkrag (An Unreconstructed Georgian, STANDING WITH RAND.)
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To: Straight Vermonter

The fed fueled gambling racket (aka: the stock market), is on the verge of going bust. And as with some European countries, bank accounts and retirement funds will be conficated, and draconian tax rates will be employed by the government to bail out the bank and business interests, again. Of course all of this will be blamed on the greedy 99%, while the 1% will walk away fom the whole mess they created clean as a whistle, all the while laughing at all of the idiots in government and the general population who fell for their bullshit plans for systematically looting the US economy. This is how soros made his fortune, and you’re an idiot if you think he couldn’t pull it off here.


17 posted on 02/11/2014 10:16:19 AM PST by factoryrat (We are the producers, the creators. Grow it, mine it, build it.)
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To: Straight Vermonter

Proves nothing. Predicts nothing.

If you want a better indication of what’s going to happen to the American business world, look at the team of law-breaking marxists currently collecting a salary at the White House.


18 posted on 02/11/2014 10:20:20 AM PST by I want the USA back (Media: completely irresponsible traitors. Complicit in the destruction of our country.)
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To: Dr. Sivana
...VERY MISLEADING!...

Come on now, don't be confusing people with the facts. People wanna panic.

19 posted on 02/11/2014 10:21:38 AM PST by FReepaholic (Stupidity is not a crime, so you're free to go.)
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To: Dr. Sivana

Exactasmurfly.


20 posted on 02/11/2014 10:22:03 AM PST by bolobaby
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To: Straight Vermonter

It doesn’t take a weatherman to see which way the wind is blowing...


21 posted on 02/11/2014 10:42:54 AM PST by Gritty (Inside every liberal is a totalitarian screaming to get out! - David Horowitz)
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To: factoryrat

“confiscated”? well, sort of. In the case of Greece which is the most recent relevant example, the confiscation amounted to discounting the federal bonds by upwards of 80%. First they discounted, hair cutted, the ones held by banks then they whittled their way into personal holdings. That’s the situation I fear most here-—the gummint will simply tell banks holding federal bonds to kiss off.


22 posted on 02/11/2014 10:49:05 AM PST by cherokee1 (skip the names---just kick the buttz)
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To: Straight Vermonter
A Progressive Republican
followed by an Ultra-Progressive
Democrat.

Then as now.


23 posted on 02/11/2014 10:51:52 AM PST by Uri’el-2012 (Psalm 119:174 I long for Your salvation, YHvH, Your teaching is my delight.)
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To: taxcontrol

I’m out of stocks and out of cash and out of precious metals and holding a Ziploc bag of random coins. LOL


24 posted on 02/11/2014 10:53:21 AM PST by Two Kids' Dad (((( 0bama's words are the distraction to the destruction ))))
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To: Straight Vermonter
Hoover:
He(Hoover) had also called on the Federal Reserve Board to raise interest rates, but the board lowered them instead, thus fueling a stock market boom in the two years prior to his presidency.
Hoover and the Great Depression

25 posted on 02/11/2014 11:04:02 AM PST by Uri’el-2012 (Psalm 119:174 I long for Your salvation, YHvH, Your teaching is my delight.)
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To: Straight Vermonter

And if it crashes the main effect we non investors will see is that all that inflation that the FED has built into the money will start appearing big time in the prices we pay for food and everything else. The current 9% or so real price inflation will jump up.


26 posted on 02/11/2014 11:12:41 AM PST by arthurus (Read Hazlitt's Economics In One Lesson ONLINEhttp://steshaw.org/economics-in-one-lesson/)
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To: pepsionice

The 1929 leg down began when it became apparent there were the votes in the Senate to ensure that Smoot-Hawley would move to reconciliation.


27 posted on 02/11/2014 11:15:30 AM PST by frithguild (The warmth and goodness of Gaia is a nuclear reactor in the Earth's core that burns Thorium)
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To: factoryrat

And Soros’s fortune will go from 20 billion to some multiple of that. He will become the most powerful man on Earth if he is not that already..


28 posted on 02/11/2014 11:16:01 AM PST by arthurus (Read Hazlitt's Economics In One Lesson ONLINEhttp://steshaw.org/economics-in-one-lesson/)
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To: Straight Vermonter

Be thankful that George Soros is past 8- and that he doesn’t live to be 105.


29 posted on 02/11/2014 11:18:55 AM PST by arthurus (Read Hazlitt's Economics In One Lesson ONLINEhttp://steshaw.org/economics-in-one-lesson/)
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To: Straight Vermonter

get money out of the banks .... market crash is one thing but bank holiday is another... what about the 200 trillion in derivatives floating around... there is no way the financial markets can handle a stock market crash today. the QE tightening has a multiple ripple effect through the system and it is not positive. why did dhs buy 1.6 billion hollow point bullets.... not for target practice...


30 posted on 02/11/2014 12:04:40 PM PST by zzwhale
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To: factoryrat

The fed fueled gambling racket (aka: the stock market), is on the verge of going bust.

********
Where would the market be today without the Fed’s massive QE program? We’ll never know for sure but it certainly wouldn’t be anywhere near the level it is today.

In June 1929, the national debt was $17 billion. Interestingly, it is $17 trillion today. However, the debt to GDP ratio was only about 16% when the depression began; debt is about 100% of GDP today.


31 posted on 02/11/2014 12:07:54 PM PST by Starboard
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To: Straight Vermonter

bkmk

thanks for posting this.


32 posted on 02/11/2014 12:13:12 PM PST by krunkygirl (force multiplier in effect...)
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To: Straight Vermonter

the USA was in far better financial condition in 1929. In fact the government had no significant debt at all. Nor did the public. And such instruments of Fraud such as derivatives and MBS’s and whole works. There is a time coming soon when we may be going down for the last time.


33 posted on 02/11/2014 12:16:25 PM PST by Revel
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To: Two Kids' Dad

I lost all of mine in the Great Global Warming Polar Vortex Catastrophe of ‘14. It was bad, total wipe out.


34 posted on 02/11/2014 12:23:15 PM PST by VRWCarea51
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To: Straight Vermonter

bttt


35 posted on 02/11/2014 12:50:07 PM PST by BenLurkin (This is not a statement of fact. It is either opinion or satire; or both.)
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To: Raycpa
This is an example of how gamblers lose money when they think they found a system.

Excellent analogy. If I had paid heed to a lot of the investment articles posted here, I would have lost a lot of money.

36 posted on 02/11/2014 12:54:22 PM PST by be-baw (still seeking)
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To: Dr. Sivana

Time fibs and absolute level fibs can be in different ranges.

In other words, the different absolute ranges over one year in itself is not misleading.


37 posted on 02/11/2014 12:58:51 PM PST by steve86 (Some things aren't really true but you wouldn't be half surprised if they were.)
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To: Tenacious 1

Said during an interview in Mexico and while on the grid. . .First rule about going off grid, don’t tell people where you are and don’t hold a press conference telling people where you are.

;-)


38 posted on 02/11/2014 1:23:37 PM PST by Hulka
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To: Straight Vermonter

The money supply increased (in billions) from 20.8 in 1921 to 24.9 in 1925, or nearly 20%, and from 24.9 in 1925 to 26.4 in 1929, or 6%.If there is a similar deceleration of the rate of increase in the money supply now, then look out.


39 posted on 02/11/2014 1:32:44 PM PST by mjp ((pro-{God, reality, reason, egoism, individualism, natural rights, limited government, capitalism}))
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- a 3 year boy on TV news today : “Please Jesus make it warm!” -


40 posted on 02/11/2014 4:18:44 PM PST by devolve (- a 3 year boy on TV news today : "Please Jesus make it warm!" -)
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