Scary 1929 market chart gains traction
Opinion: If market follows the same script, trouble lies directly ahead

By Mark Hulbert, MarketWatch

CHAPEL HILL, N.C. (MarketWatch) - There are eerie parallels between the stock market'��s recent behavior and how it behaved right before the 1929 crash.

That at least is the conclusion reached by a frightening chart that has been making the rounds on Wall Street. The chart superimposes the market'��s recent performance on top of a plot of its gyrations in 1928 and 1929.

The picture isn't pretty. And it's not as easy as you might think to wriggle out from underneath the bearish significance of this chart.

http://www.marketwatch.com/story/scary-1929-market-chart-gains-traction-2014-02-11

It is interesting..

I looked at this yesterday..

The only issue I have with it is that between 1926 and 1929 the market rose by 400%. The current market rise over the last 3 years is not even close to that percentage. Its in the 20's..

However, this current cycle is being fueled by the FED and not sound economic fundamentals. The tech stocks are way overvalued.. Emerging markets are on the decline.. Anything is possible..

Here is a video and article with Austrian School Economist Marc Faber.

http://finance.yahoo.com/blogs/talking-numbers/dr--doom--tech-stocks-even-more-overvalued-now-than-in-2000-134456190.html

http://mises.org/daily/3788

The Forgotten Depression of 1920

snip>The United States, by contrast, allowed its economy to readjust. "In 1920/21," writes Anderson,

we took our losses, we readjusted our financial structure, we endured our depression, and in August 1921 we started up again.… The rally in business production and employment that started in August 1921 was soundly based on a drastic cleaning up of credit weakness, a drastic reduction in the costs of production, and on the free play of private enterprise. It was not based on governmental policy designed to make business good.

The federal government did not do what Keynesian economists ever since have urged it to do: run unbalanced budgets and prime the pump through increased expenditures. Rather, there prevailed the old-fashioned view that government should keep taxation and spending low and reduce the public debt.[4]<snip