Comparison between 1929 crash and 2020 crash by matching the respective first lows (November 13th 1929 and March 22nd 2020).
1929 and 2020 data have been normalized before superimposing the charts...therefore increase or decrease are perfectly comparable Apparently even without FED intervention back then the reaction was very much the same on the way up...FOMO FOMO FOMO
If history repeats itself ... we will see very soon!
I think we're not in the same situation than in the 30's .
The FED avoided banks & institutions failures by supplying cheap money and purchasing bad debt.
The danger would come from the central banks themselves this time ... but it would be more political than technical ( they can always write off the bad debt and print more money). And it would take a looong time.
I don't think we'll see bank sink this time. They are just becoming zombies.
What the US government is not doing is to make sure people keep jobs ...
The helicopter money is just a short term solution to keep the markets afloat until the election.
If they really wanted to stimulate the economy (as EU & CN are doing), they would focus on 5/10 year infrastructure en technological investments... the same money being spend but not in the same way.
PS: I also think it is a bear market rally... but it can go far very far... there is not limit to hope.
antrap77
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@guibl, I agree there are so many differences...but one of the key foundations of technical analysis is that, besides all the different scenarios, market might behave in similar ways and patterns also from a psychological point of view. Like if all those differences were lumped in and the final result is the same...very curious to see how this fast&furious rally will play out in the next few weeks. 1929 and 2020 bear market rallies are very similar in exuberance and strength and they appear having a strong common behavioural component: FOMO and anxiety!
TheMarketDog2
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@antrap77, agree, you can also check the correction of the late 70s on tje DJI. ABCDE correction, i think we sould look into that. i wouldn't be surprise if we do a ATH now
Chinese government ( CCP ) are dropping the dollar as retaliation for the Taiwan visit, HSBC money laundering has bigger implications i am sure its a U.S coordinated attack against the CCP, all these issues and the elections are huge problems. the main problems is the CCP dropping the dollar and the unlimited printing by the FED, hyperinflation is coming by all the dollars returning from China and Russia dropping the dollar.
The FED avoided banks & institutions failures by supplying cheap money and purchasing bad debt.
The danger would come from the central banks themselves this time ... but it would be more political than technical ( they can always write off the bad debt and print more money). And it would take a looong time.
I don't think we'll see bank sink this time. They are just becoming zombies.
What the US government is not doing is to make sure people keep jobs ...
The helicopter money is just a short term solution to keep the markets afloat until the election.
If they really wanted to stimulate the economy (as EU & CN are doing), they would focus on 5/10 year infrastructure en technological investments... the same money being spend but not in the same way.
Readings : academic.oup.com/oxrep/article/26/3/385/373434
PS: I also think it is a bear market rally... but it can go far very far... there is not limit to hope.