1929 vs. 2008

Discussion in 'Technical Analysis' started by Pekelo, Nov 17, 2008.

  1. Pekelo

    Pekelo

    The 2 charts put together, draw your own conclusion:

    [​IMG]
     
  2. excellent chart
     
  3. Pekelo

    Pekelo

    One thing to notice the 50% bounce and that retraced also 50% to -25% in 5 months. We are now approaching that 50% from the all time high. It is around 788 for the SPX...
     
  4. Care to offer what the correlation ratio is between both charts?
     
  5. i think what's happening is serious

    i do look at a number of signs and signals

    but i give each event it's due - they're snowflakes, no 2 alike

    i remember 2001, everyone saying 'is this 1974, 1929, 1998?'

    it was the great tech bear of 2001

    the history they were looking for, was right in front of them
     
  6. Pekelo

    Pekelo

    I didn't make the chart, just posted it. The starting highs are put together and that is about it. 1929 started with a quick 50% drop in 2 months, followed by a 5 months rally phase. 2008 progressed differently.

    So you have to draw your own conclusion, maybe there are no similarities, TA-wise...
     
  7. rros

    rros

    Good visual excercise, but I am afraid you can't draw any firm conclusion.

    Go back and overlap the chart of 1987's crash. It will actually look closer than the 29s period. AND if you overlap the chart of the Nikkei's crash from the 90s onward over the period started on Dec 07 for the dow, it will also look equivalent. Each chartist draws conclusions according to the charts used: the ones overlapping the Nikkei state we are deflating and in a long protracted period of zero bound rates which the government is fighting (reflating). Those overlapping 1987, believe the bottom is in place and after a flat 2009 we will slowly climb to new highs in 2 years time.

    And yet those looking at 1929... well, those expect a depression. Regarding 1929, it took about 1 year to break the lows of 11/29 after the collapse of the Bank of the United States. By 1931 unemployment was at 15%. Some say current stock prices are valued at equivalent prices of 1931, yet unemployment today is not even half of that, arguing that prices are extremely depressed and not even justified. Many, many theories out there...
     
  8. PetaDollar

    PetaDollar Moderator

    What would be super-interesting is if someone could annotate the chart with the number of stocks making new 52-week lows on each new low in price.
     
  9. Conclusion #1: data mining.

    Conclusion #2: time to rally (first legs match in distance)

    Conclusion #3: more bear nastiness ahead (final low extensions do not match)

    Conclusion #4: The first conclusion is correct, nothing can be definitively surmised from the overlay

    Now if 2000-2002 also lined up with 1921-1923, you might be on to something.
     
  10. OK. So how does the 2000 drop line up with the 1920 drop?

    Imperfectly but not bad (my data was close only pre 1929).

    <img src=http://elitetrader.com/vb/attachment.php?s=&postid=2181882 width=800>
     
    #10     Nov 18, 2008