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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Square_Dealings who wrote (45143)	4/5/2000 5:16:00 PM
From: John Madarasz	Read Replies (1) \| Respond to of 99985

Don't hold your breath... waiting for history to repeat itself word for word. Richard Ney makes a good case also about markets being propped on Fridays to maintain hope for the following week. We shall see... Regards, JM

To: Square_Dealings who wrote (45143)	4/5/2000 5:22:00 PM
From: Crimson Ghost	Read Replies (1) \| Respond to of 99985

Michael: Frankly I would be amazed if the day to day movement of the market continues to correspond precisely to the 1929 pattern. That said, the broad pattern of rapidly escalating volatility is virtually identical. Has ominous implications for today's bubble markets. For this is the kind of action that portends major trend changes.

To: Square_Dealings who wrote (45143)	4/5/2000 5:33:00 PM
From: pater tenebrarum	Read Replies (3) \| Respond to of 99985

Michael, no, if the correlation keeps holding true, there will be another indecision day tomorrow. it's only that modern day statisticians have lumped the Friday and Saturday trading together in one day, which is why you will often find the Saturday bit missing on 'historical' charts. an interesting parallel to '29 is a) the rescue of the market by 'organized support' b) the rush by officialdom to come out with statements stressing the 'soundness' of economic fundamentals, as well as the wheeling out of stock market gurus (Abby Cohen in this case) to re-affirm the commitment to stocks , no matter how overvalued. in essence, the show put on by the Clinton administration today reminds one a lot of the '29 administration's similar effort to calm nerves after the initial break while Abby's comments are reminiscent of Irving's 'permanent plateau' promise. i have argued many times that aside from the obvious differences, a great many parallels exist between today's environment and that of the roaring twenties, the most important ones being the advent of new technologies, big increases in productivity, and low CPI inflation which seduced the Fed in both eras to allow monetary policy to be too loose, thereby encouraging the formation of a speculative stock market bubble. as others have pointed out on occasion, the similarities can even be detected in articles in the financial press then and now. in many cases you'd think an article written in '28 or '29 speaks of today...it's downright eerie. in '29 the decision to sell was taken over a weekend that was filled with rumors about investment trusts planning to buy big, and admonitions to take the opportunity to buy the dip, a strategy that had worked extremely well until then. similar to the '90's bull market, the '20's bull market had several big breaks along the way, from which the market recovered every time to soar to even greater heights. to this day it remains a mystery why the masses decided to abandon the market all of a sudden after that weekend, which gave no indication whatsoever of what was about to happen. regards, hb