MarketWatch recently reported on a particularly alarming correlation between the Dow Jones Industrial Average for the period 1928-1929 and 2013-2014. Curves is hauntingly similar, and if there was any correlation the New York Stock Exchange is set to crash any minute now.
Now there is by all means a lot of skepticism and more positive experts think that this connection does not exist at all, and that the market situation is completely different.
Tom McClellan, the man behind the McClellan Market Report, notes to the site:
"....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."
The picture isn’t pretty. And it’s not as easy as one might think to wriggle out from underneath the bearish significance of this chart.
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.”
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.
Now there is by all means a lot of skepticism and more positive experts think that this connection does not exist at all, and that the market situation is completely different.
Tom McClellan, the man behind the McClellan Market Report, notes to the site:
"....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."
The picture isn’t pretty. And it’s not as easy as one might think to wriggle out from underneath the bearish significance of this chart.
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.”
Scary to think about. It's hard to predict these things but the math is sound.
SvaraRadera