Another Depression?

[Gaspar]

The Dow Jones Industrial Average is repeating a pattern that appeared just before markets fell during the Great Depression, Daryl Guppy, CEO at Guppytraders.com, told CNBC Monday.

"Those who don't remember history are doomed to repeat it...there was a head and shoulders pattern that developed before the Depression in 1929, then with the recovery in 1930 we had another head and shoulders pattern that preceded a fall in the market, and in the current Dow situation we see an exact repeat of that environment," Guppy said.

The Dow retreated 457.33 points, or 4.5 percent last week, to close at 9,686 Friday. Guppy said a Dow fall below 9,800 confirmed the head and shoulders pattern.

http://www.cnbc.com/id/38092759

[Townsend]

Which way does the market have to go so that they can headline the story with the term "surprise" in it?

"economists surprised by depression"

or

"economists surprised we're not in a depression"

[Conan71]

Now isn't the time to be buying. Some were predicting this would happen last July and there's been some big hits in the last year but no lasting retreat save your cash and buy like mad when it bottoms out. It could go as low as 6500 again if there are more shocks to the financial system vis a vis commercial real estate.

[Gaspar]

Now isn't the time to be buying. Some were predicting this would happen last July and there's been some big hits in the last year but no lasting retreat save your cash and buy like mad when it bottoms out. It could go as low as 6500 again if there are more shocks to the financial system vis a vis commercial real estate.

I got a phone call from my financial advisor at 8:15, shortly after I posted this.  She recommended that I sell off a few things.  I wonder if other brokers are making similar calls this morning.

[waterboy]

I would be a lot more concerned if the "head and shoulders" effect was only noted as happening before a huge depression. But that was not clearly stated. In other words, how often has this effect occurred and NO depression occurred?

[Gaspar]

I would be a lot more concerned if the "head and shoulders" effect was only noted as happening before a huge depression. But that was not clearly stated. In other words, how often has this effect occurred and NO depression occurred?

That's a good question.  I'm not really sure what indicators they are monitoring.  The article is a little vague.  My financial advisor did say that there is not a whole lot of optimism in her world right now.  People are liquidating, and her firm is making it expensive.  MorganStanley-SmithBarney raised their commissions to a minimum of $100.  That's insane!

[Red Arrow]

Brokers make their money regardless of the investors profits or losses. 

Let's see....  minimum commissions are up, get customers to do a transaction.

[Gaspar]

Brokers make their money regardless of the investors profits or losses. 

Let's see....  minimum commissions are up, get customers to do a transaction.

The more I thought about it, the angrier I got. . .so I just filled out a transfer to Scottrade.  They're paying all transfer fees too!

I appreciate the solid advice of a licensed financial planner, but I typically spot things at about the same time she does, and therefore the $100 a pop is not worth it.