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

To: sidney-8 who wrote (51578)	5/21/2000 11:27:00 PM
From: westes	Read Replies (2) \| Respond to of 99985

The fact of the matter is that the economy topped in June of 1929 and started down from there. To blame the market or the economy for 1929 and the later depression completely misses the point. It does not matter whether the market first caused further downside in the economy (because it did) or whether the downcycle in the economy caused further declines in the market (because it clearly did as well). The only point that matters is that the combination of a severely down market and a downcycle in the economy fed on each other viciously. To bicker over which led is to miss the point entirely. Having said this, the current decline comes on an economic up cycle, which shows signs of continuous acceleration for years. Where do you see the parallel to 1929? I see the parallel in the overvaluation of stocks; I see the parallel in easy credit. I do NOT AT ALL see the parallel to the economic cycle. Without an economic downcycle in close proximity to the beginning of a severe market correction, you don't have the fuel to feed the fire of a full depression. An economic downturn at the end of a down cycle in the market would not be the same thing at all. I see our stock market correction ending somewhere between NASDAQ 2600 and 2000. A drop to 1000 would be surprising, but even if it happened the circumstances are not right for a depression to follow it. I see no reason why economic prosperity cannot continue for another 10 years. The only thing that could stop it would be OPEC pulling another 1970-style oil embargo and crisis on us. What is your argument?