Tuesday, July 28, 2015

charts:Tom DeMark Warning

TOM DEMARK WARNS: Chinese stocks are following the path of the Dow in 1929

While China’s stock market suffered one of the largest declines on record yesterday, we ain’t seen nothing yet, according to the man who predicted the low point for the Shanghai Composite index in 2013.
Tom DeMark, founder Arizona-based DeMark Analytics, believes there’s significant carnage still to come.
He’s predicting China’s stock market will decline by an additional 14% over the next three weeks as the market demonstrates a trading pattern that mimics that of the 1929 US crash, according to a report from Bloomberg.
DeMark suggests the benchmark Shanghai Composite index will sink to 3,200 points in the weeks ahead, extending the decline from the June 12 peak to 38%.
 
The premise of his call is that “the gauge’s moves since March are tracking those of the Dow Jones Industrial Average in 1929 when the gauge lost as much as 48%”. Despite the threat of government intervention undermining his call, DeMark believes his market indicators are most effective when the market is “manipulated”.
“Lip service and intervention like that — it’s false,” said DeMark, adding “there’s a certain way in which the market unfolds. The only thing the government could do is to postpone it.”
DeMark believes that despite renewed talk from the CSRC, China’s stock market regulator, that they will step up efforts to underpin the market, the increased intervention won’t be enough to sustain the 16% rally seen since the index bottomed earlier this month.
“Markets bottom on bad news, not good news. You want to have the last seller sell. We got good news at the recent low. The rally is artificial,” he said.

See the comparative charts for yourself...
DJIA up to October 16,1929, Courtesy of Worden Bros
Current Shanghia 2015 chart, Courtesy of Worden Bros
Now see what happened subsequent to October 16,1929 for the DJIA...
DJIA 1929 chart, Courtesy of Worden Bros

Keep following JustSignals using Twitter, @StockTwits or Follow By Email. 
Just submit your email address in the box on the Blog homepage
This has been posted for Educational Purposes Only.   Do your own work and consult with Professionals before making any investment decisions.  
Past performance is not indicative of future results



No comments:

Post a Comment

Note: Only a member of this blog may post a comment.