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Is It Déjà Vu All Over Again for the Dow

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February 10, 2010 – Comments (26)

Adam Hewison at Market Club always puts together excellent videos regarding the analysis of all kinds of asset classes. Here is his newest one regarding the Dow. In particular, he is noting the the comparison between the move down and the retracement of the Dow in 2007-2010 to the behavoir in 1929-1933. This is nothing new, I have brought up the comparison several times myself. But I am a nobody. Adam Hewison has been trading for many years and has been calling trends sucessfully for years.

Now, don't take this out of context. He is not saying that we are going to get the exact same move or even a similar move. He is just noting many of the similarities to the price behavior. And like I pointed out before (What To Look For As a Long Term Trend Change Confirmation - http://caps.fool.com/Blogs/ViewPost.aspx?bpid=330257) ***IF*** Jan 2010 was the peak retracement and we have a massive bear market ahead of us, it will need to be confirmed. And that link shows you what to look for (in my opinion) for a trend change confirmation.

But what Adam is suggesting, just like I did last week Taking a Step Back: The Case for Staying Bearish for the Near Term - http://caps.fool.com/Blogs/ViewPost.aspx?bpid=338359, now is the time to start thinking defensively. Odds favor a substantial pullback for the next several weeks and I don't believe what we just experienced was the end of it.

So do not dismiss out of hand any comparisons between the Dow now and the Dow of 1929. Please watch the entire video, it is definitely worth a couple of minutes of your time

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Déjà Vu Dow

Is It Déjà Vu All Over Again for the Dow?

In today's short video we examine the crash of 1929 and the similarities to today's Dow. This video is not meant to scare anyone, but to educate investors and traders of the possibilities that may exist in today's market.

We could be, repeat, could be very close to a tipping point similar to that of 1930 when the Dow had ended a 50% correction to the upside. I invite you to watch my latest video and see what makes sense to you.

As always our videos are free to watch and there are no registration requirements. If you agree or disagree with this video please feel free to comment on our blog.

Every success,
Adam Hewison

26 Comments – Post Your Own

#1) On February 10, 2010 at 9:48 PM, Tastylunch (29.40) wrote:

I wonder what his track record is like

before he went on this marketclub blitz I had never heard of him. I do like his videos though

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#2) On February 10, 2010 at 10:43 PM, binve (< 20) wrote:

Hey Tasty, I have watched his videos for a few years now (probably 3  or more) and he has called many trends in oil, the dollar, stocks, gold, etc. correctly. Not perfectly of course (no one does), but far better than chance.

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#3) On February 10, 2010 at 11:35 PM, Tastylunch (29.40) wrote:

binve (

same here well only two years on my part. Yeah his last couple calls on Gold were pretty spot on.

But you do have to wonder these gurus come from sometimes. Not saying I don't trust him just curious if anybody knows where he came from.I haven't been able to find out.

I don't know if I were in his shoes if I'd be so sharing. Which makes me always speculate on someone's motivation before trusting what thye say :)

I wish his vids were embeddable.

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#4) On February 10, 2010 at 11:46 PM, binve (< 20) wrote:

Tasty,

I hear where you are coming from. But the reason for his videos is so that people will pay for the Market Club service. That is what the whole "trade triangle" is all about. (The are a bunch of free tutorials on the trade triangles so you can see what they do). It looks like a proprietary momentum based timing system. Looks pretty cool. But you can see that he always mentions it in the videos.

So that is his game, to showcase the triangles. But I find his TA and comments very useful, which is why I watch the videos :)

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#5) On February 10, 2010 at 11:59 PM, Tastylunch (29.40) wrote:

oh I got that Binve

sorry I seem to be at mess at communicating  last couple days

what I've been clumsily trying to say is this more or less. Let me see if I can clear it up.

If I discovered a TA or QA or FA power method I don't think I'd share it even for money. Instead I'd try to use it and run my own little fund with it.

From his videos Adam makes his proprietary trade triangle seem pretty appealing (which as you said is why does them), which you know of course makes me wonder he just doesn't use them exclusively for himself. :)

There could be a lot of plausible benign reasons why he'd share. Maybe he likes the consistent money of subscriptions, maybe trading is too stressful for him, maybe he likes adulation and being recognized, I dunno.  But you know me being a fairly skeptical person what kind of returns he's gotten before launching the club.

not that it matters, people I know  and respect in the blogosphere vouch for him so I figure he's likely on the level. But you know I can't help but be curious. 

anyway sorry I wasn't clear, I hate wasting people's time.

again not criticizing him, just wondering aloud, because I do like his videos too. :)

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#6) On February 11, 2010 at 12:11 AM, gman444 (29.03) wrote:

Very nice, Binve.  I just wish he would have said more about the Greenspan/Bernanke efforts to avoid precisely what he is illustrating.  Other than "flooding the markets with money" he did not address this.  Well, perhaps that is enough said. 

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#7) On February 11, 2010 at 12:20 AM, binve (< 20) wrote:

LOL! No worries man. Quite often I don't say what I mean either on the net. It is because I am making some implicit assumption that I expect others to be on board with .... which is laughable because usually my ideas are so crazy that nobody but me thinks about the issues in anything close to that way :)

.... If only everybody would simply understand what I mean, and not what I say, my commenting would be so much easier :)

I see what you mean. If it really gave you an advantage, than why share it?

I think because it is a same way with Elliott Wave. The rules are simple enough (impluses come in fives, corrections come in threes, 3 needs to be the longest, etc.) but it is in the application where a tool becomes useful. No signal / TA / anlaysis is black and white and requires interpretation and judgement to be effective. Most people don't use EW effictively so they call it bogus. So with Market Club, I think of it like Elliot Wave. He is selling a tool. He knows how to interpret the tools. But his service (I suspect) is not a blind "I pick stocks and you follow" type deal.

I think of it like engineering too: Just because someone knows the equations governing transport phenomena doesn't mean they know how to implement a succesful thermal design :)

There is a big difference in understanding a tool (whether it be hand tools, equations, or TA indicators) conceptually and using it effectively in practice. And I think Hewison's service is you paying access to the tool, not him breaking the signals down and telling you what to do with it. I could be way off, but that is what I think is going on. 

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#8) On February 11, 2010 at 12:21 AM, gman444 (29.03) wrote:

Tasty,

 I once had a conversation with a friend of mine who spent his career in the financial world about precisely what you are talking about.   These guys who sell newsletters or services---some of them are actually pretty good, and/or on the level.  I think you touch on some of the reasons they might do this--I came to conclude that it is a way to make a living without having to actually invest, or to supplement their investing income.  But of course our initial consensus (tongue-in-cheek) was that these guys care about each and every one of us, and our futures.   

But maybe you are asking more than this, are you wondering about him trying to advance an ideology, agenda, etc.? 

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#9) On February 11, 2010 at 12:22 AM, binve (< 20) wrote:

Hey gman! Yeah, Hewison likes to keep his videos short and focus on TA. But he has talked about that very same issue in the past (on some gold and dollar videos if I'm not mistaken) with a little more detail. But still top-level, he's always focused on the trade :) Thanks!

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#10) On February 11, 2010 at 12:30 AM, Tastylunch (29.40) wrote:

gman444

No you got me pegged.

I know a lot of guys who do what you describe, but before I pay attention to what someone says I try figure out what their game might be. You cnan't know for sure of course, but I find it helps to tyr and surmise whether a) they are any good at what they do and b) they ahvea  good reaosn for sharing.

Cause For every honest service ou there there is 99 frauds

Just check out Lenny Dysktra :) believe it or not he's back again

www.nailsinvestments.

LOL 100% accuracy !  140 wins zero losses! Hahahahhaha then why did you lose your house Lenny?

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#11) On February 11, 2010 at 1:12 AM, gman444 (29.03) wrote:

ROFLOL!!!   Lenny IS back!!!  wow.  Maybe it just goes to show that in today's world, it pays to have no shame.  

I couldn't agree more that anyone who gets info from any of these services should be very skeptical/cautious.  I think it is just a source of cash flow for most of them.  It is one of the great things about CAPS--the emphasis placed by so many different people, so many times about doing one's own due diligence, and one's own thinking. 

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#12) On February 11, 2010 at 9:28 AM, miteycasey (30.20) wrote:

I don't like to invest on *IF*.

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#13) On February 11, 2010 at 9:38 AM, binve (< 20) wrote:

miteycasey,

I don't like to invest on *IF*

Did you even read what I wrote above? Please follow the link and actually read it.

Here it is, again.

Now, don't take this out of context. He is not saying that we are going to get the exact same move or even a similar move. He is just noting many of the similarities to the price behavior. And like I pointed out before (What To Look For As a Long Term Trend Change Confirmation - http://caps.fool.com/Blogs/ViewPost.aspx?bpid=330257) ***IF*** Jan 2010 was the peak retracement and we have a massive bear market ahead of us, it will need to be confirmed. And that link shows you what to look for (in my opinion) for a trend change confirmation.

My link says NOT to invest in this peak as a short because it is an if at this point. But to wait for a confirmation move. And I lay out what that should look like.

... uhhh, thanks for the comment.

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#14) On February 11, 2010 at 10:14 AM, miteycasey (30.20) wrote:

I read the link and still do not 'trust' it.

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#15) On February 11, 2010 at 10:18 AM, binve (< 20) wrote:

Fine by me.

The point of this post, just like the point of any of my posts, is *not* to try to convince you of anything. I am an analyst who is sharing observations. That's all. It is immaterial to me whether you agree or disagree with my observations or conclusions. But I do hope that my observations are useful in helping you to formulate your own opinion, even if your conclusion is completely opposite of mine.

..

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#16) On February 11, 2010 at 10:38 AM, yujin7 (< 20) wrote:

i'm utterly speechless with lenny dysktra's website....can't get anymore no scammish than that...

 

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#17) On February 11, 2010 at 10:41 AM, kdakota630 (29.76) wrote:

Excellent video, binve.  I've been thinking for a while that we're going to experience something similar in pattern to the 1929 crash.

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#18) On February 11, 2010 at 10:52 AM, binve (< 20) wrote:

Thanks kdakota! Yeah there are too many fundamental, political and technicaly similarities to dismiss this comparison out of hand as so many investors are wont to do. There will be fantastic long term opportunities to be long in the market. But I don't think that opportunity was March 2009, and is sure as hell is not now. Thanks!

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#19) On February 11, 2010 at 11:08 AM, yujin7 (< 20) wrote:

i like this post, it made me thinking real hard...but then again, if something like that were to happen, it would be highly difficult for any economist to forecast such a downturn and something to that extend. Europe could just be the tip of the iceberg...but somehow i remember now that China is still pretty much the main driver here of growth. i would think it would be unlikely that would happen in this decline, possibly in the near future few yrs down the road, quite possibly we could see a bubble. as for now...i am still calling a bull market correction and sticking to my shorts, and will need to rethink the extend of this decline when we get deeper down~

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#20) On February 11, 2010 at 11:14 AM, kdakota630 (29.76) wrote:

...it would be highly difficult for any economist to forecast such a downturn and something to that extend.

Economists are aleady forecasting it, just as they did prior to 2007.  The difficult part is trying to pinpoint when it will happen, especially when the gov't keeps changing the rules.

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#21) On February 11, 2010 at 11:15 AM, binve (< 20) wrote:

yujin7,

Thanks! Yeah, that is really the point of this post and this one: (What To Look For As a Long Term Trend Change Confirmation - http://caps.fool.com/Blogs/ViewPost.aspx?bpid=330257). I want to get people to think about this as a possibility. Not to necessarily jump the gun on long term shorts yet. But to consider that this move the last 10 months was nothing more than a bear market rally. There is so much economic spin taking place, many will believe that there is a true recovery instead of just an inventory rebuild cycle (which is all it is so far).

Not saying that we will crash, but I think the possibility of one is large enough the people should be paying attention to it..

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#22) On February 11, 2010 at 3:34 PM, yujin7 (< 20) wrote:

u r right, they have forecasted it...now i remember...

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#23) On February 11, 2010 at 3:39 PM, yujin7 (< 20) wrote:

great post binve on (What To Look For As a Long Term Trend Change Confirmation - http://caps.fool.com/Blogs/ViewPost.aspx?bpid=330257).

i'm staying cautious~

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#24) On February 11, 2010 at 3:41 PM, binve (< 20) wrote:

Thanks yujin!

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#25) On February 11, 2010 at 6:59 PM, uclayoda87 (29.35) wrote:

Now it seems to be getting interesting, like a Rocky movie with bulls and the bears trying to beat the other senseless.  Short-term this market is made for the traders but trying to build an investment portfolio is a bit scary.  Take two recent blogs by binve, one tells us that China is well on the way to acquiring a critical mass of gold to mint gold/silver coins to expand its money supply and eventually become the new world reserve currency, while this blog shows the parallel between the great depression 1 versus the great depression 2, which looks like the transition from the Hoped V recovery to the Feared W recovery.  The one way to play both of these would be to buy the miners and metals on these irrational sell offs and hope that the W downturn will not last too long.  Holding cash now is still reasonable, as long as the dollar index remains high, but if this falls as fast as it went up you need a quick exit strategy like CEF.  My last post:   At World’s End I had considered the possiblity that the map to World's End was given to us two months ago in the Fractals!! blog.  But going over the waterfall is not the end, but just a path to an unknown place where we would eventually need to find our way back. 

Right now is probably not the best time to get between a bear with short-squeeze disease and a bull with mad-cow disease, unless you are a fearless trader with quick reflexes and great timing.

 

 

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#26) On February 11, 2010 at 7:34 PM, binve (< 20) wrote:

uclayoda87, Hey man!

Now it seems to be getting interesting, like a Rocky movie with bulls and the bears trying to beat the other senseless.

Da-da-dadadada-dada-da-dadada .... (hard to write out the Rocky theme) :) . LOL! you are right. It feels like a slugfest :)

I think that synposis is right on!

With inflation you can ride out in stocks
With deflation you can ride out in cash

But I think we will be getting the worst of all possible outcomes: stagflation. And gold makes the most sense to me as a hedge for this case (well, long gold and short stocks)

We will have deflationary impulse, like you say above, so cash is fine for the short term. But long term holding the dollar when it could be in an appreciating currency (gold) is a losing proposition.

Thanks man!!..

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