Markets Showing 'Extreme Similarities' With 1929 Crash: Pro

[Nova78]

Investors should remain on the sidelines and wait for a market correction as a 4-year rebound comes to an end, Sandy Jadeja, chief market strategist at SignalPro said on Tuesday.

Jadeja said the current market cycle showed "extreme similarities" with 1929.

"If you take a look at the patterns which repeat themselves through the years, they are re-emerging. So what it's suggesting is: it isn't all good out there," he said.

He said the historical comparison showed that the S&P as a leading indicator of the broader market was forewarning investors. While the "small speculators" had pushed the Dow to new highs, the S&P had not broken those record levels.

Copper prices were also a sign that markets were getting ahead of themselves and that economic growth is not as strong as some investors anticipate.

As it is used in construction, automobiles and the electronics industry, copper is a leading indicator of economic growth.

"It is really warning us, like a weather pattern. It's saying…there is a storm out there," he said.

"Watch copper prices. If we start to see a continuation to the downside (in copper) you're going to see the Dow and the S&P start to catch up," he said.

He did not expect a 30-40 percent decline but recommended investors "stand aside".

Grapes of wrath ?

 

[Mr. H.]

Yeah, I've been seriously thinking about selling the bulk of my mutual fund holdings and parking for a while. I did it just before the big correction of ought '07, then got back in near the bottom.

 

[Mr. H.]

 

[SteadyMercury]

Investors should remain on the sidelines and wait for a market correction as a 4-year rebound comes to an end, Sandy Jadeja, chief market strategist at SignalPro said on Tuesday.

Jadeja said the current market cycle showed "extreme similarities" with 1929.

So is this what you're doing Nova78?

Or are you one of those people who predicted another collapse thruout the big run-up and missed all that opportunity to make money, so have no gains to worry about losing?

 

[Mr. H.]

Look at the graph above. 4 year "run up" then bam.
We may be at the peak of another 4 year run.
What's the risk in converting to cash at this point?
What's the risk of staying in the market?
The risk of staying in at this point is higher than bailing and waiting.

 

[SteadyMercury]

What's the risk in converting to cash at this point?
What's the risk of staying in the market?

1. Missing out on gains
2. Taking losses

The risk of staying in at this point is higher than bailing and waiting.

If I could state this (or the opposite) with any amount of certainly like you can I'd be a much wealthier man.

 

[Dugdale_Jukes]

Look at 1929. Mistakes were made then, but one of them wasn't bailing out the scum of the earth.
Probably 75% of the ($400-500kkkk nominal value of) bad paper existing in 2008 is still out there ticking.
Figure it like this using the chart below: 80% of the gains after 1984 are credit-fueled ReagaNUT delusion. It's coming down. The only questions are when and how hard. The reason insiders are a little bit spooked now is the Nipponese yen is out of sync with the EU and the US cash explosions (QE). That is how it will end, the question is - is this the imbalance that topples the temple?
Cool factor: people who voted for Bush in 2004 basically elected Obama in 2008.
Problem: it wasn't a very big step up.

 

[JimmieD]

Investors should remain on the sidelines and wait for a market correction as a 4-year rebound comes to an end, Sandy Jadeja, chief market strategist at SignalPro said on Tuesday.

All securities are always owned by someone. There is no way that all investors can remain on the sideline. Everyone is always invested in something.

Jadeja said the current market cycle showed "extreme similarities" with 1929.

With some noticable differences. One major one is that the monetary regieme is different. That alone should be sufficient to make any comparrisons really suspect.

"If you take a look at the patterns which repeat themselves through the years, they are re-emerging. So what it's suggesting is: it isn't all good out there," he said.

He said the historical comparison showed that the S&P as a leading indicator of the broader market was forewarning investors. While the "small speculators" had pushed the Dow to new highs, the S&P had not broken those record levels.

Copper prices were also a sign that markets were getting ahead of themselves and that economic growth is not as strong as some investors anticipate.

As it is used in construction, automobiles and the electronics industry, copper is a leading indicator of economic growth.

"It is really warning us, like a weather pattern. It's saying…there is a storm out there," he said.

"Watch copper prices. If we start to see a continuation to the downside (in copper) you're going to see the Dow and the S&P start to catch up," he said.

He did not expect a 30-40 percent decline but recommended investors "stand aside".

An even better indicator of economic growth would probably be long term interest rates, which are still depressed. Long term rates are a function of a risk premium, inflation expectations, and future interest rate expectations. The rates suggest expectations of long term sub-par growth.

This doesn't mean that the stock market will necessarily reflect this. Stock prices are a function of other factors: supply of securities, expected corporate profits and earnings, expected dividends, anticipated capital appreciation, relative value to bonds, interest rates and expectaions ....

With the risk free rate near zero, it is to be expected that asset prices will rise (this includes stocks, bonds, houses, etc..). This doesn't mean that economic conditions are all well though. You can have rising asset prices with high unemployment and slow economic growth. Asset prices will probably continue to rise from here, especially as long as the risk free rate is expected to remain at about zero. If interest rate spreads were to widen, asset prices would probably start rising even faster.

One of the major keys I pay attention to is long term interest rates relative to short term interest rates. I want to see short term rates stable and long term rates stable or rising. I don't want to see decreasing spreads or yield curve inversion.

 

[mudwhistle]

Look at the graph above. 4 year "run up" then bam.
We may be at the peak of another 4 year run.
What's the risk in converting to cash at this point?
What's the risk of staying in the market?
The risk of staying in at this point is higher than bailing and waiting.

The market isn't going to react the way it has in the past.

Obama has flooded the market with newly printed dollars. All he has to do is sell all of that and he can crash the market. It is unsafe right now because of that.

 

[Truthmatters]

and the people who were caught as wide eyed and dumbfounded as Bush at the Crash offer their great predictions?

 

[Truthmatters]

[ame=http://www.youtube.com/watch?v=YsDmPEeurfA]President Bush Addresses Nation on Economic Crisis - YouTube[/ame]

 

[Truthmatters]

Look at the fear in his eyes

 

[theHawk]

Look at the fear in his eyes

Go look in a mirror, look at the stupidity of yours.

 

[Mr. H.]

Look at the graph above. 4 year "run up" then bam.
We may be at the peak of another 4 year run.
What's the risk in converting to cash at this point?
What's the risk of staying in the market?
The risk of staying in at this point is higher than bailing and waiting.

The market isn't going to react the way it has in the past.

Obama has flooded the market with newly printed dollars. All he has to do is sell all of that and he can crash the market. It is unsafe right now because of that.

Unsafe at any greed.

 

[auditor0007]

We are on the verge of seeing a massive expansion of the economy.

 

[Mr. H.]

Here's hoping.

 

[konradv]

Here's hoping.

An increase in gold prices is usually a negative indicator. Wall St. suggests that we're seeing the reverse of that trend.

Wall Street sours on gold - The Buzz - Investment and Stock Market News

 

[auditor0007]

Look at the graph above. 4 year "run up" then bam.
We may be at the peak of another 4 year run.
What's the risk in converting to cash at this point?
What's the risk of staying in the market?
The risk of staying in at this point is higher than bailing and waiting.

You are basing your prediction on a chart that covers about eight years. The stock market does not have a history of crashing every four years.

 

[Old Rocks]

Maybe we should have a look at what the record of the posters on here has been as Prognosticators. A good measure to look at would be the predictions for the 2012 elections. Hmmmmmmmm...........

 

[SteadyMercury]

Investors should remain on the sidelines and wait for a market correction as a 4-year rebound comes to an end, Sandy Jadeja, chief market strategist at SignalPro said on Tuesday.

Look at the graph above. 4 year "run up" then bam.
We may be at the peak of another 4 year run.
What's the risk in converting to cash at this point?
What's the risk of staying in the market?
The risk of staying in at this point is higher than bailing and waiting.

So I'm curious did you guys follow your own advice and miss out on the solid gains since late March?