Uh oh: Stock market is tracking just like 1929

On yesterday’s radio program, Glenn discussed a chart that shows remarkable parallels between the Dow Jones Industrial Average leading up to the 1929 crash and today. Tom DeMark, the founder and CEO of DeMark Analytics, discovered the trend found on the graph, and he joined Glenn on radio this morning to discuss what the eerie pattern could mean for the United States.

MW-BU310_scary__20140210132547_MG

“I want to bring on Tom DeMark, the CEO and founder of DeMark Analytics. This is the guy who just started to map 1928, 1929, then he laid over the last two years here, and he found something that is really quite disturbing. They are almost identical,” Glenn said. “If you chart the Dow and what it’s doing in 1928 to 29 in the crash and what the Dow is doing now in the last two years, it show… if it continues to chart this way, it would show that our 1929 Depression-era crash happens in April.”

Tom explained that he has been in the investment business for almost 45 years, and he has always been considered overly optimistic. In the last five or six years, however, he has found himself more and more discouraged by the analytics he has seen.

“We try the measure supply and demand because that’s what drives prices. There’s a major component, which is sentiment, and extremes are met at highs and lows. There’s extreme optimism or pessimism. So we try to measure those and incorporate them into fundamentals,” Tom said. “But what’s happened in the last five years has been really troubling. What had worked in the past and seems to work globally – it works very well in the Far East, Middle East and our analysis there – but the domestic market here in the States is troubling.”

“It seems like there’s an influence that seems to incite fear every time we approach what appears to be a top in the market,” he continued. “At bottoms, it works very well, but at top, there seems to be interference, and we don’t know where it’s coming from… It became common knowledge that it was the Central Banks… It’s tough to adjust at the tops. With the bottoms, we are able to identify bottoms.”

The trend found in his latest graph was actually stumbled upon accidently. After tracking the 2008 crash against the stock market decline of the 1970s, he began looking into the stock market patterns of the last couple of years.

“So we’re looking at the chart, and it is phenomenal,” Glenn said. “Am I reading this right… if they continue to chart the same, we have the October 1929 crash in April?”

“Well, we could have had it last week. There was a 10% chance that could happen. It probably won’t and the market will rally and we have seen the rally now,” Tom said. “There’s two scenarios currently: If the Dow Jones Average closes above 16,000 next Monday and Tuesday, then there’s a chance yes, we could go down. And it could be something comparable to 1987. We’re shifting things a little. Our two templates, 1929, 1987 are being adjusted. It’s possible that could happen.

“We have to have a trigger. The trigger would be we’d have to decline on the S&P average below 1762,” he continued. “We have been using that for some time… It’s so widely known right now, and we are a firm believer, that markets have bottomed because the last seller, figuratively speaking, has sold. We think a lot of people have sold based upon this comparison. So it may be premature right now, but it’s going to happen.”

Watch the entire interview below:

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  • MB

    Buy gold? Lulz

  • http://www.youtube.com/watch?v=V8FvmesaxXg Revan

    Ladies and Gentlemen who voted for Obama thanks now we are all poor.

  • Mike Nelson

    See, this is the propaganda BS I’m talking about, Sam.

    The market has been borked for a looooong time now (I’ve been out entirely since before FlyLip 0bama was elected), but there’s at least two things wrong with your statement:

    1.) The Dow (which is amongst the crappiest indications of what the economy is actually doing) is currently still near all-time highs, and

    2.) The damage has been done already, and we’re just waiting for it to (catastrophically) adjust, which would have happened under any president

    If you’re not willing to acknowledge that Bush, Clinton, and Bush (if not even further back than that, all the way to our exit from the Gold Standard in 1964 – if not even further than THAT) were all part of this circumstance, you’re just a propagandist, or an ignorant hack.

    I’ve seen you do better than this, so why have you so recently sunk to the level of Toure, and started one-lining things that are highly inaccurate at best? Why have you sunk to the simian level of braying like a red-faced liberal? Why don’t you exercise some devotion to your OWN cause, and learn how to say things that are both inflammatory AND TRUE?

    It’s pretty crappy to see you ‘on my side,’ yet actively undermining the legit points of a strong and factual position with your self-serving, asinine, vapid, and presumptuous outbursts. You have become ammunition for the fight against those who oppose 0bama for good reasons.

    I think you’re actually – and I’m not kidding when I say it – I think you’re actually a racist, because you dismiss GOOD facts with imbecile prose just to say something, anything, that will get you a ^

  • Anonymous

    A perfect premise upon which the ‘obamofascists’ will seize the 401(k) assets to “protect them” from “the market”. This will be done by an ‘executive order’ as an ‘emergency measure’, much like similar actions have been perpetrated by the European Union.

    Of course “the market” has not been ‘free’ in decades, being artificially manipulated [inflated, deflated, and 'rescued'] by the increasingly ‘visible hand’ of progressive interventionists.

    They will seize the assets, and hand them over to the Federal Reserve cartel to pay back the bad mortgage debt that it ‘absorbed’ during the manufactured ‘financial crisis’.

    Under the ‘full faith and credit’ of the United States of America’s Treasury, they will take our liquid assets and give us promissory notes – government bonds.

    I’d love to be wrong.

  • http://www.youtube.com/watch?v=V8FvmesaxXg Revan

    Nothing got better and yeah A lot of jerks screwed it up in the past but are you telling me what our president is doing is helping the economy? I mean it is not easy for people who are out of work and are being lied to by this white house claiming things are better. After five years of this bull crap I can careless what anyone thinks anymore because we are all screwed and being lied to at the same time. I put out hundreds of applications and it has been almost a year since I seen a paycheck so sorry if I am not as cheerful as you seem to be about the economy and if that makes me racist than I guess that makes over 20 million people racist to. Jack***!

  • Mike Nelson

    No, Sam, it’s about FACTS.

    The market has not been healthy in YEARS – more years than FlyLip has been in the public eye, let alone in politics.

    And your attitude probably has a lot more to do with your situation than anything else; you have talked about the bible and God and Faith quite a bit in the past, but when you come here and allow your ego and your hubris to get the best of you, you are making yourself look like nothing so much as the asshat that B D and Bruno want you to appear.

    The people who you’re angry with fall into two categories:

    1.) True Believers (which means that facts do not matter to them – but facts ALWAYS matter to the side who wishes to be set free by Truth), and
    2.) Trolls (who will always exhibit antics designed for only 1 purpose: to get a reaction)

    If you want to be Better Than, then you have to behave as Better Than, and that means not falling to the same tactics that work for True Believers or Trolls.

    Look back at your body of posts for a few months’ history and I reckon you’ll find the same thing I see in your posts, which is that, some time ago, you fell off the wagon and started to get shitty with people on a personal level.

    Take the advice, mate: you SUCK at being a jerk to others… so stop competing to be the biggest jerk. It’s like watching idiot women argue and snip each other over gossip that doesn’t matter to anyone else — but those idiot women will catfight each other to the point where one of them gives up and the other will proudly wear the label of “Stupid Bitch Queen” because it was legitimately earned.

    Just. Stop. Playing. That. Game.

    Stupid bitch = stupid bitch, and even if you’re not the queen, you’re clearly identified as a runner up by anyone else watching the show… and the Trolls are making you look very stupid, indeed.

    You WIN when you stop playing, so when I say “don’t be a dick” I’m telling you how to win faster.

    You can choose your PATH, or you can choose your DESTINATION… but rarely, rarely do those two choices lead to the same place, and those who insist on walking the path are in for a hard, hard road.

    There is nothing for YOU in the Stupid Bitch Game, and someone else having last word is not as important Doing the Right Thing.

    ffs, open your eyes and look at what you’re writing… not only can you not convince anyone of your righteousness by doing what you have been doing… you can’t even maintain your own standing with the people who have similar destinations in mind as you say you would like to reach.

    You know why?

    Because it’s not a place where you get to and then stop… the destination, in this fight, unlike the Constitution, is a living thing, a moving target, and you only GET there by continuing to GO there.

    Don’t be stuck in stagnant, tepid piss-water and filth by bogging yourself down. Find a way to laugh with them and then go away from the puter for a while when you find your patience worn out.

    It took me a loooonng time to learn that. I recall you saying you’re in your mid-20s, and when I was that age you couldn’t tell me SHIT. Take good advice and do better than I did, or you WILL suffer because you have earned only that interaction with the world because you can’t be an asshole to people without lodging that attitude within yourself, and when you do that you carry it with you EVERYWHERE, ALL THE TIME.

    Simple lesson: when you’re a dick to others, you’re a dick to yourself EVERY time. Find the picture of the destination you want, and step off the path of snide self-righteousness, and the first thing you’ll notice is that the Bible is Right in at least one regard: FAITH WITHOUT WORKS IS DEAD.

    Your works are your actions, and whatever you do, that is what you put inside yourself for others to judge.

    I won’t lecture you any more, but damn, I hope you pull hard and hear the *popping* noise soon, cuz you’re not helping your own cause at all.

    Good luck on your job search.

  • http://www.youtube.com/watch?v=V8FvmesaxXg Revan

    It is so sad that idiots like you just love to pretend everything is fine.

  • Mike Nelson

    Well, I’d rather be an idiot my way, than yours, cuz it’s pretty clear you’re one miserable person to spend time with :)

  • http://www.youtube.com/watch?v=V8FvmesaxXg Revan

    Well atleast we can agree with that anyways.

  • BlueMN

    You must be in love all the time then.

  • BlueMN

    Robert Reich Already did this one. The answer is the same as it was back then; tax the wealthiest 1% at the 91% rate.
    http://www.youtube.com/watch?v=YCbAyk8aRxI

  • Anonymous

    Hmm, don’t think so Glenn. If people could actually predict the stock market by lining up two lines on a graph as you have, we would all be stinking rich.

    So based on your graph, in April we all need to buy like crazy and then sell three weeks later and retire billionares. Yeah, right.

  • Danielle Kevin

    my&nbsproomate’s&nbspsister-in-law&nbspΜ­­­­­­а­­­­­­κ­­­­­­℮­­­­­­ѕ&nbsp$­­­­­83&nbspevery&nbspհ­­­­­­օ­­­­­­υ­­­­­­r&nbspon&nbspthe&nbspс­­­­­­օ­­­­­­Μ­­­­­­р­­­­­­υ­­­­­­τ­­­­­­℮­­­­­­r.&nbspShe&nbsphas&nbspbeen&nbspfired&nbspfor&nbspten&nbspΜ­­­­­­օ­­­­­­ո­­­­­­τ­­­­­­հ­­­­­­ѕ&nbspbut&nbsplast&nbspΜ­­­­­­օ­­­­­­ո­­­­­­τ­­­­­­հ&nbspher&nbspcheck&nbspwas&nbsp$­­­­­17373&nbspjust&nbspW­­­­­­օ­­­­­­r­­­­­­κing&nbspon&nbspthe&nbspс­­­­­­օ­­­­­­Μ­­­­­­р­­­­­­υ­­­­­­τ­­­­­­℮­­­­­­r&nbspfor&nbspa&nbspϜ­­­­­­℮­­­­­­W&nbspհ­­­­­­օ­­­­­­υ­­­­­­rs.&nbspհ­­­­­­℮­­­­­­r­­­­­­℮’s&nbspthe&nbspѕ­­­­­­і­­­­­­τ­­­­­­℮&nbspto&nbspread&nbspmore,…&nbsphtt&#112&#x3A&#x2F&#47Profitbeatsinvalentineday2014happympose&#x2E&#113&#114&#46&#110&#x65&#116&#47&#x6F&#119&#97&#87

    ❤❤❤ ❤❤⮪❤ ❤❤⯪❤❤ ❤❤❤ ❤❤❤ ❤❤❤The market has not been healthy in YEARS – more years than FlyLip has been in the public eye, let alone in politics.

  • John Williams

    You tax the wealthy at 91% you only get one outcome, business leaving the country in droves. They will leave and take THIER hard earned money with them. Keep going with this logic and see where we end up.

  • BlueMN

    The tax rate for the wealthiest was at 91%-94% during the 30′s, 40′s, and 50′s, you know, when the economy was booming. That’s where that logic ended up.

  • landofaahs

    Glenn, did you ever ask if there were other stock market charts that were not disastrous and did not lead to a crash. I think the stock market is propped up, overpriced and ready for a crash also, but not because of that chart.

  • Anonymous

    Very convenient to have guests that confirm your delusional messianic prophecies, Glenn.

  • Scott Boufford

    Your history is incredibly bad, BlueMN. The entire 30′s were lost to depression…so…your time line is plain inaccurate. You attribute a booming economy to a 91% tax rate on at the top? It had nothing to do with WW2 manufacturing in the 40′s and another war effort int he 50′s? We were MAKING things.

    Are you telling me that if your job paid you $1 Million annually, you’re ok taking home just $90,000 of that? Or is it only ok because it’s someone else’s money? Does none of this have anything to do with government SPENDING. Maybe if they SPENT LESS, and lived within their means they wouldn’t have gotten us in to this mess.

  • BlueMN

    You might want to learn a little history yourself! Haha!

    It took a while to get out of the Republican Great Depression, but please note where the upturn began, 1933. http://en.wikipedia.org/wiki/File:GDP_depression.svg Also where the GDP is by time of the Pearl Harbor attack.

    If war was the solution to a great economy, then Iraq and Afghanistan must’ve been gangbusters for the US economy, all those Tomahawks and smart bombs didn’t MAKE themselves, how did that work out?

  • Anonymous

    The stock market is inflated by cheap money, but many of the companies with high price to earnings are fundamentally sound. I think there will be a correction, but not catastrophic as long as the Fed can land this jumbo jet of a monetary policy safely.