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  1. #1
    Senior Member HardyHard's Avatar
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    1929 stock market charts parallels with today's charts (SCARY)



    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.)

    One of the biggest objections I heard two months ago was that the chart is a shameless exercise in after-the-fact retrofitting of the recent data to some past price pattern. But that objection has lost much of its force. The chart was first publicized in late November of last year, and the correlation since then certainly appears to be just as close as it was before.

    To be sure, as McClellan acknowledged: “Every pattern analog I have ever studied breaks correlation eventually, and often at the point when I am most counting on it to continue working. So there is no guarantee that the market has to continue following through with every step of the 1929 pattern. But between now and May 2014, there is plenty of reason for caution.”

    Tom Demark added in interview that he first drew parallels with the 1928-1929 period well before last November. “Originally, I drew it for entertainment purposes only,” he said—but no longer: “Now it’s evolved into something more serious.”

    Another objection I heard two months ago was that there are entirely different scales on the left and right axes of the chart. The scale on the right, corresponding to the Dow’s DJIA -0.21% movement in 1928 and 1929, extends from below 200 to more than 400—an increase of more than 100%. The left axis, in contrast, represents a percentage increase of less than 50%.

    But there’s less to this objection than you might think. You can still have a high correlation coefficient between two data series even when their gyrations are of different magnitudes.

    However, what is important, McClellan said, is that the time scales of the two data series need to be the same. And, he stresses, there has been no stretching of the time dimension to make them fit.

    One of the market gurus responsible for widely publicizing this chart is hedge-fund manager Doug Kass, of Seabreeze Partners and CNBC fame. In an email earlier this week, Kass wrote of the parallels with 1928-29: “While investment history doesn’t necessarily repeat itself, it does rhyme.” And, based on a number of indicators rather than just this chart drawing the 1928-29 parallel, he believes that “the correction might have just started.”

    DeMark is even more outspokenly bearish. If the S&P 500 SPX +0.01% decisively breaks the 1762 level, he told me, then a major bear market will have only just begun.

    You may still be inclined to dismiss this. But there were many more were laughing last November when this scary chart began circulating. Not as many are laughing now.
    Source: http://www.marketwatch.com/story/sca...ion-2014-02-11

  2. #2
    Banned wudsmash's Avatar
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    i've been following this ever since 'when pattern first identified'. if it doesn't break correlation, then end of this month is fucking armageddon.

  3. #3
    Senior Member Lights's Avatar
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    Oh shit.
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  4. #4
    11 inch arms crew Troll's Avatar
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    Good thing I haven't invested yet

    Looks like I will get my chance to buy low
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  5. #5
    Menior Sember VAPump's Avatar
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    You better be buying gold right now.

  6. #6
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  7. #7
    Stabber of Backs BackStabber's Avatar
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    Get your tax returns ready. This will be a great chance to invest low. Buy huge amounts of stocks that "can't" fail and watch your money grow exponentially.
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  8. #8
    StayJelly
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    idk what this graph means but it looks bad

  9. #9
    Senior Member JackTheRipped's Avatar
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    Quote Originally Posted by HardyHard View Post

  10. #10
    African with internet. Armagedon30's Avatar
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    Everything will be OK lol, it always is.
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  11. #11
    Menior Sember VAPump's Avatar
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    I wonder if yahoo, google and Apple stocks will take as big if a hit as they did in 1929? I'm still surprised they made it.

  12. #12
    Senior Member JackTheRipped's Avatar
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    Quote Originally Posted by VAPump View Post
    I wonder if yahoo, google and Apple stocks will take as big if a hit as they did in 1929? I'm still surprised they made it.
    I remember back then it was still owned by hitler and was called geigle.

  13. #13
    Resident Dumbass BroBeans's Avatar
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    Quote Originally Posted by BackStabber View Post
    Get your tax returns ready. This will be a great chance to invest low. Buy huge amounts of stocks that "can't" fail and watch your money grow exponentially.
    Got my tax return already, what are some stocks that "can't" fail LOL
    We fraudin' now GOAT Troll
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  14. #14
    Senior Member JackTheRipped's Avatar
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    Quote Originally Posted by BroBeans View Post
    Got my tax return already, what are some stocks that "can't" fail LOL
    brazzer stocks

  15. #15
    Stabber of Backs BackStabber's Avatar
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    Quote Originally Posted by BroBeans View Post
    Got my tax return already, what are some stocks that "can't" fail LOL
    Most banks.
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  16. #16
    MUTANT MOD Dawlphinracer's Avatar
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    Quote Originally Posted by Troll View Post
    Good thing I haven't invested yet

    Looks like I will get my chance to buy low

    this
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  17. #17
    MUTANT MOD Dawlphinracer's Avatar
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    Someone teach me how to buy stocks pls, I have been learning for a month now, but anyone got some secret step by step websites???

    Thanks brahs will rep.
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    None of this one scoop crap, 40 scoops of mutant mass a shake 600 times a day, CMON
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  18. #18
    Senior Member undercovermisc's Avatar
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    Would this be a good time to play with stocks for a first timer? I don't have a lot of money to invest, but would like to put a small amount down to see how it works.
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  19. #19
    11 inch arms crew Troll's Avatar
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    Quote Originally Posted by Dawlphinracer View Post
    Someone teach me how to buy stocks pls, I have been learning for a month now, but anyone got some secret step by step websites???

    Thanks brahs will rep.
    secret? LOL, go charles schwab
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  20. #20
    Stabber of Backs BackStabber's Avatar
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    Quote Originally Posted by Dawlphinracer View Post
    Someone teach me how to buy stocks pls, I have been learning for a month now, but anyone got some secret step by step websites???

    Thanks brahs will rep.
    Just use Scottrade and they will practically hold your hand.


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