October 28th, 2020:
Another home run for the panic scale. The Dow is down over six percent, so far, this week.
September 27th, 2020:
If you haven't been hearing about it already, in the next couple weeks, you're going to be hearing a lot of
commentary about the similarities between 1929 and 2020. Comparisons to 1929 come up often in autumn
but, cyclically, there is good reason for it this year. This past week, a new Supreme Court Justice was
nominated for the highest court in the land. In law, the concept of "precedent" is one of the most important
legal principles. The principle is derived from the Latin maxim, "Stare decisis et non quieta movere" which is
translated as "to stand by decisions and not disturb the undisturbed." This means that courts should abide by
precedents and not disturb settled matters.
Similarly, we need to look for precedents in prior stock market history to see if there is a cyclical precedent for
the actions of the current market. Looking through my 165 year daily database, there is indeed precedent for a
91 year cycle in the market. In fact, there are several of these precedents but one is especially interesting
because it is tied to the panic of 1893. The panic of 1893 led the United States into the worst economic depression
it had experienced up to that point in history, prior to the 1930's Great Depression. As can be seen in the chart
below, the market made an important low 91 years (less one day) after the 7/26/1893 panic on 7/25/1984. Simarly,
the current market made an all-time high 91 years (less one day) after the 1929 top. If this is any indication,
the market may have no choice over the next few weeks but to follow cyclical precedent and "stand by decisions
and not disturb the undisturbed." Ironically, though, it will result in quite a disturbance.
September 8th, 2020:
It's all about slugging percentage.
The Labor Day Weekend panic arrived right on schedule. Here are some market headlines from the last couple days:
I know it's not supposed to be possible to predict the stock market but it sure sounds like a panic to me and
I'm also sure that Elon Musk would agree.
August 29th, 2020:
In the sport of baseball, there is a metric known as "slugging percentage." In this statistical approach,
all hits are not valued equally. Bigger hits (extra-base hits such as doubles, triples and home runs) are
given progressively more weight than singles. Slugging percentage is one of the best evaluators of power
in baseball. Applying this approach to my panic scale, the two most powerful days of 2020 occur this
autumn on 9/6 and 10/26.
July 26th, 2020:
The panics and crashes of the 1980's and 1990's have been repeating to some degree 7420 calendar
days later. The all-time closing high in the Nasdaq Composite index last week was also 7420 days
from the 3/27/00 dot-com bubble closing high in the Nasdaq 100. If last week's highs hold, there's
probably going to be another crash into August 7th.
May 16th, 2020:
After looking more closely at the internals of my Barrier Indicator, I realized that the 6/3 low is much more important
and severe than originally indicated (see revised chart below). In fact, it may be the strongest signal for a low this
year. I publish this chart six months in advance so I missed the added importance of that date originally. There are
a huge number of repeating market bottom cycles around 6/2 to 6/3 that should knock the market down. The important
4/29 top in my Market Tops Family Tree has held, so far, and the next couple weeks could be a very dangerous time
for the market.
May 2nd, 2020:
Last week's market top is related to a contiguous series of repeating market tops going all the way back to
1899 (see below). It's very rare to find a series going back that far in history. What makes this cycle even more
intriguing is that it is eerily similar (though inversely) to the cycle I discovered almost 20 years ago which I used to
accurately forecast the exact week of the 2002 bear market low (you can see that original chart by clicking the
9000 day cycle link and scrolling to the bottom). It's a roughly 7,340 to 7,365 day cycle that shows up repeatedly in
history between market tops and bottoms. If we put both "family trees" together, they are confirming that we started a
bear market earlier this year which will continue until December 8th, 2022.
Below, I've extended the original 2002 bear market bottom forecast and it indicates
that the current bear market will not be over until December of 2022.
For reference, you can see below the historical charts for each year in the market tops cycle going all the way back to 1899.
April 12th, 2020:
With the major indices rallying twelve percent last week, the market had a buying panic right
into the important April timeframe on the Panic Scale. The market is exhibiting an extreme in optimism
which is not likely to be sustained.
March 28th, 2020:
The market made its panic low within one trading day of the 3/21 spike on the panic scale and the major indices gained
over ten percent for the week, with the Dow having its biggest three day rally since 1931. So, where does the market go
from here? The April Panic Scale offers some clues. It indicates that the time period between 4/8 - 4/14 has the largest
cluster of repeating relationships to prior panics and is the most dangerous time period of the year for the stock market.
If we're going to see a repeat performance of the March panic, or something even worse, it should occur in this timeframe.
In the unlikely event that the rally off the March low continues all the way into the April panic cluster, the crash would
then occur directly afterward (as it did in February). Either way, much more pain is coming to the market in April.
March 21st, 2020:
When every day is a panic day, none of them are. 15 of the last 20 trading days have seen daily closing moves of
greater than three percent in the Dow and S&P500. At first glance, this would appear to be a spectacular failure
of my panic scale and, to be honest, I sincerely hope it is because an alternate interpretation is much more ominous.
The 12% down day on 3/16 certainly qualifies as a crash and, if it was the "big one," it should have been identified
by my panic scale. But, there can only be one worst day in a stock market crash and my panic scale says we haven't
seen it yet. There's a date in the first half of April that is the best candidate for an even worse crash than we've
seen, so far, in March. It implies that the increasing volatility in March is setting the stage for an even bigger event
Now that I've scared you all half to death, let me offer a bit of potential good news, at least for the next couple weeks.
In addition to identifying possible panic dates, the panic scale also often works well as a market turn indicator,
identifying those time periods of extreme optimism and pessimism in the market. Since almost every day in March
was a panic day, it might be better to look at the panic scale from this perspective. In the charts below, I've
combined the S&P 500 with the panic scale and, as you can see, it has identified most of the important market turns
for 2020. It indicates at least a temporary bottom this weekend and it might be time for a rally.
As I mentioned in February, the inputs for the panic scale were revised so, in the chart below, January
has different scale numbers than originally posted but the turn dates are mostly the same under the
February 29th, 2020:
What a week and month. The Dow made its all-time closing high on 2/12, right before the largest amount
of panic hits for 2020, and then promptly crashed over 4,000 points and -14% in roughly two weeks. Can
that possibly be a coincidence? If it is, be prepared for another "coincidence" later this year.
February 22nd, 2020:
I held off posting my Barrier Indicator for 2020 until today because the market largely ignored it
in 2019. It seems to be back on track, now, so I'm sharing it here.
February 1st, 2020:
Why did the Dow pick yesterday to decline two percent in a single day? Because 1/31 had a
large number of repeating relationships to prior panics, as shown in my panic scale.
December 28th, 2019:
If yesterday's new all-time high holds, the last three bull market tops will be connected exactly by phi.
November 9th, 2019:
Yesterday's new all-time closing high
is linked by a log spiral to the 1987, 2000 and 2007 bull market
October 2nd, 2019:
Some nice symmetry between the current market and the 1997 panic. Does not bode well for October.
October 1st, 2019:
I've released my Panic Scale for October (see link). If there's going to be an October crash this year, it
should occur during the second week of October. The last week of October and first week of November
also have unusually large clusters of bottom and panic cycles so it could result in more than one panic,
reaching maximum intensity around the highlighted dates.
September 24th, 2019:
There's an interesting spiral with the 1987 crash forming this week.
August 31st, 2019:
Here's my Barrier Indicator with the S&P 500 overlaid. It is forecasting a top next week and a plunge
into 9/20, however, I would not be surprised if the market turned back down before 9/5. I've also
updated my Panic Scale for September. The August panic scale caught the 8/5 and 8/23 panic sell-offs
within one trading day.
August 5th, 2019:
There was a panic in world stock markets today occurring exactly on the date of the 8/5 spike on my Panic Scale.
Don't mistake complexity for randomness.
August 3rd, 2019:
It was the worst week of the year for the stock market, as seen in the headlines below, and it coincided with the largest cluster of
bottom cycles seen on my Barrier Indicator, which is calculated years in advance. Still think financial markets are completely random?
August 1st, 2019:
The Dow made its all-time high on 7/16 and the S&P 500 peaked on 7/26. The large cluster of market bottom cycles shown on my
Barrier Indicator for 8/2 appears to be kicking in and creating strong downward pressure on the market for the next few days. Based
on supporting cycles, this is likely the start of a larger decline into Autumn. I've also updated my Panic Scale for August.
June 26th, 2019:
I've published my Panic Scale for July (see Panic Scale link) and there is a big spike coming up in a few days on July 1st. The market made a
bottom on 6/3, in line with my 1987 Barometer discussed below, but there was no accompanying panic. The 6/21 peak in the SPX coincided
within one trading day of the 6/24 peak indicated by my Barrier Indicator (see Barrier Indicator link). This indicator will be updated for the
next six months in a couple days and it is showing market weakness from now into August.
June 1st, 2019:
In my last post on May 5th,
I warned about a six sigma event during the last week of May. During that week, the Dow suffered its
worst week of the year and two events occurred that may be seen in hindsight as being six sigma type events for the market (see headlines below).
The first event was a warning to the United States by China conveyed in historically significant language, "Don't say we didn't warn you," used
just before China entered wars with India (1962) and Vietnam (1979). The second potential six sigma event for the market was the surprise tariffs
on Mexico, resulting in some media headlines describing it with the synonymous term "black swan event." I, myself, find it difficult to believe that
it's a coincidence that a forecast of a six sigma event on May 30th, 2019 (the specific date on the 1987 Barometer) made years earlier, and publicly
posted for scrutiny weeks earlier, coincides with the exact day (again May 30th, after the market close) of a Presidential decree on tariffs
characterized as a potential "Black Swan" event by some in the investment community. What are the odds of that being attributed to chance?
Is it possible that there is some underlying order in the apparent randomness of the universe and markets?
While the month of May was a bad month for the stock market, there has not been a crash or outright panic yet. It's possible, however, that the
1987 Barometer forecasted the six sigma event that will cause a stock market panic to develop over the next few days. The next four
trading days, 6/3 - 6/6, are the most dangerous days in the current cycle for a panic to develop in the stock market, according to my supporting
cycle work. I also have barometers with other panics and crashes which target these dates, as well. We'll know in the next few days if there is
going to be an accompanying "Black Swan" or "Six Sigma" move in stock prices.
May 5th, 2019:
The worst single day in the entire history of the stock market was October 19th, 1987. If stock market panics are not random
events, there should be some link or similarities between them. What better day to use as a benchmark than 10/19/87? My 1987
Barometer compares each day to October 19th, 1987 and measures the number of similarities between a given day and 10/19/87.
By "similarities," I mean cyclical and other forces associated with stock market panics. Here is a five year chart of the indicator
from 2015 to 2020. There is a six sigma event occurring on one day during the last week of May, 2019. That day has an outlier
reading (similarity to 10/19/87) that is six standard deviations from the mean. I do caution that it could just be a coincidence,
as strange coincidences happen all the time in life, and none of the smaller sigma events have been associated with stock market
panics; but, I have never seen one this large so it caught my attention. If the market starts breaking down seriously later in May,
this may have something to do with it.
April 27th, 2019:
To paraphrase Shakespeare, "Trading days, or calendar days, that is the question."
When looking at cycles and symmetry in the stock market, one must choose between counting calendar days or actual
trading days. Both are useful, as events occurring in the calendar day realm often have an uncanny way of also working themselves
out in precise trading day relationships. The S&P 500 and Nasdaq closed at new record highs yesterday but is this confirmation
of a new bull market or a double top? The trading day count of my bull market growth spiral indicates a top exactly on 4/26 or 4/29
and the market has rallied right into this timeframe, not to mention one of the biggest spikes on my Panic Scale in years. Also, Bloomberg
news reports today that large speculators, mostly hedge funds, are shorting the VIX at a rate never seen before (see chart below).
Volatility has dried up in the market and they are betting massively that this calm in the market will continue. When so many are on
one side of a trade, it usually doesn't end well. So, when you read the giddy headlines about new highs in the market this weekend,
remember that "All that glitters is not gold."
April 25th, 2019:
For some unknown reason, Asian markets often respond the best to my timing dates and forecasts.
The China market may be the "canary in the coal mine" for what is about to happen in the rest of the world.
Their SSE Composite index made intra-day double tops on 4/8 and 4/22 (two of the most important turn
dates on my Barrier Indicator below) and then had its second worst day of the year today. There is a big
spike on my Panic Scale (click panic scale link) this weekend. Watch asian markets for signs of panic in the
next couple days.
April 13th, 2019:
We have a 4/5 Dow top and 4/12 S&P 500 top. The 4/5 Dow top is still holding by a fraction but the S&P 500 made a new
2019 high on Friday. It appears that my 4/8 Barrier date and 4/13 panic spike (see panic scale link) conspired
to form a sort of buying panic top last week off the Christmas lows. Last year's 3/13 top also coincided with a
3/13 spike on my panic scale. The universe apparently does not distinguish between buying or selling panics (they are two
sides of the same coin). Monday, 4/15, is my line in the sand date for a top on all indices. If the rally continues
next week, I don't see anything that can stop if for a while.
April 6th, 2019:
Looks like a massive inversion is forming into my Barrier Indicator's biggest turn date (4/8) for the first half of 2019.
These cycles have stopped some of the worst bear markets and crashes in history. We'll see next week if they can
stop this current rally. Also, the 2018 bull market top coincided with a growth spiral from 1982. Here's another
spiral from 1982 indicating a top this weekend.
March 23rd, 2019:
In another incredible display of symmetry, the current bear market is repeating the tops made during the 2000-2002
bear market almost to the exact day, 18.53 years later. There's a fractal element to this, as well, as the declines
and rallies in the current bear market are of greater magnitude than the 2000 to 2002 bear market. If this pattern
continues, we have just entered the most devastating time period of the bear market which should accelerate and
last until well into 2021.
March 4th, 2019:
My Barrier Indicator, published at the beginning of the year, forecasted a top today and now downward pressure
into April. Here's the indicator with the S&P 500 overlaid.
February 5th, 2019:
I've showed how the 2018 bull market top appears to be linked to a spiral emanating from the 1982 low (see 2018
bear market link). Well, I've discovered another even more exact spiral anchored in the August 25th, 1987 top which
connects the 3/24/00 and 10/11/2007 tops, along with a potential top on February 6th, 2019. Each of the
previous tops along this spiral was followed by a brutal market crash. If this spiral is indeed responsible for the
current extraordinay rally off the Christmas low, a lot of people aren't going to believe what happens next.
January 20th, 2019:
Is the stock market currently locked into a lunar cycle? So far, every major top and bottom of this bear market
has coincided with the lunar declination cycle when the moon makes its extreme northern declination. If the
market is going to reverse back down and test the Christmas panic low, it should start next week.
December 21st, 2018:
As forecast, the Ghost of Christmas Panics Past haunts the market. This story does not have a happy ending.
December 15th, 2018:
So you think markets can't crash in December? Think again. Back in the 1800's, it wasn't unusual at all. Here are
several market charts from 1895, 1896, 1899 and 1916.
December 8th, 2018:
There was panic selling in the stock market last week. Not surprisingly, it began with a three percent down day in the major
indices right on the December 4th monthly spike on my panic scale.
November 18th, 2018:
Panic in crude oil and bitcoin last week. My panic scale identifies dates that are especially vulnerable to panic activity and
can be applied to any market in any country.
October 10th, 2018:
The market couldn't fight gravity forever and responded in true Wile E. Coyote fashion this week as my Barrier Indicator
forecasted it would in October. Supporting cycles, along with my Panic Scale, indicate more October weakness ahead.
September 2nd, 2018:
The stock market is closed for Labor Day weekend but this weekend is an important potential turning point in the market.
The chart below is a modified version of the cycles I used to forecast the 2002 market low. In this version, cycles
are forecasting a bull market top into 9/2/18. The S&P 500 made a new all-time high last week on 8/29 and next week's
market action will determine if these cycles are the controlling cycles in the market.
The market movement from the 1962 low to the 1998 high appears to be repeating again with a 36 year low to high cycle
from 1982 to 2018. The two sub-cycles of 9191 days and 3979 days added together equal 13,170 days which is twice a
well-known astronomical cycle so there's something for everybody. A condensed version of the chart is shown below.
Here's a combined chart of the 1962 - 1998 market move overlaid with the 1982 - 2018 market move. There
are several similar 20 year sub-cycles between the two 36 year cycles.
In addition to the cycles shown above, there is an interesting spiral relationship forming between the 1982 and
1994 lows and the 2000 and 2007 bull market tops. The spiral ideally projected a bull market top on August 1st, 2018,
however, the major indices (Dow, S&P500 and Nasdaq) peaked and bottomed on different dates along the spiral
anchor points so it's difficult to pinpoint an exact target date for the spiral. Depending on which previous turn dates
are used, the target date for the spiral will shift slightly. A top sometime in August or September, however, would cover
all the possibilities from all the possible spiral anchor points, with the last week of August being the average or midpoint
of the varying spiral target dates.
So, there is definitely a lot of cyclical evidence that the bull market may be nearing an end if it
July 27th, 2018:
If Pi has anything to do with the stock market, it should make front page news again in the next week or two.
July 7th, 2018:
My Barrier Indicator has pretty much called most of the important market turns for the first half of 2018
and it is now saying that bullish forces peaked this week and bearish forces increase from here throughout
the summer and into autumn (click Barrier Indicator link for the updated indicator for the next six months).
June 9th, 2018:
Here's my Barrier Indicator with two additional dates shown outside the randomness zone. Although it
looks like the market wants to continue to rally into the first week of July, there is a potential barrier
this weekend that could derail the rally, at least temporarily. It's not as strong a signal as some of the
other barriers this year, and it was favored to be a low, but 6/9 looks like the 2/26 date where the
SPX rallied to the same price of 2779 and then pulled back sharply. If there's going to be a pause in this rally,
I would expect it to occur now.
May 3rd, 2018:
It's make or break time for the market today. Here's my Barrier Indicator for the first half of 2018 with S&P 500
intraday low prices overlaid through this morning. The three major low time periods identified for the first half of 2018
were 2/11, 3/30 and a double bottom on 4/26 and 5/2. If the market can't recover and make a bottom today, the 5/6
spike on my panic scale looks ominous.
April 8th, 2018:
Today is the April panic spike on my Panic Scale (see Panic Scale link) and, not surprisingly, the market is staring right
into the abyss as it sits precariously on support levels of questionable strength. We'll know tomorrow if those support
levels hold or if they buckle and collapse the market. There is no need to worry as long as the SPX stays above Friday's
low of 2586. If, however, the SPX starts trading under the 200 day moving average at 2594 and then takes
out Friday's 2586 low and then the 4/2 low of 2554, all the elements are in place for a stock market panic.
March 28th, 2018:
Here's my Barrier Indicator for the first half of 2018 with S&P prices overlaid through yesterday.
The two major lows for the first quarter identified at the beginning of the year were 2/11 and 3/30.
The interpretation is that the market is very close to an important bottom.
March 23rd, 2018:
Here's a chart of the S&P 500 for 2018 overlaid on my Panic Scale. The February dates coincided with the panic low and the March
date coincided with the pre-panic top. It's not perfect but do you still think markets are random?
March 5th, 2018:
Get ready for some more volatility. The most extreme reading for the year on my Panic Scale hits next week. Here's a chart of the VIX
(volatility index) for 2018 overlaid on my Panic Scale.
February 5th, 2018:
Here are some business headlines from today. How does the Panic Scale know?
January 14TH, 2018:
There was a major panic in Hawaii yesterday over reports of an imminent missile attack (see headlines below). If the stock market
had been open, there would have almost certainly been an intraday "flash crash" in response to these reports. 1/13 was an important
date on my panic scale (see panic scale link). There's a very strong likelihood that this weekend will mark the end of the bull market
18 years after the 2000 January bull market top.
January 6TH, 2018:
Here's a chart of the VIX (volatility index) for 2017 overlaid with my Panic Scale. Although 2017 had record low
volatility, the most extreme spikes in the Panic Scale were usually accompanied by spikes in the VIX index.
November 3RD, 2017:
The 1987, 2000 and 2007 tops are forming perfect eighth ratio relationships into 11/3/17.
July 17TH, 2017:
As noted on my Panic Scale, 7/14 had a large number of geometric relationships between
the 1929 and 1987 crashes. "Black Monday" in China occurred within one trading day.
July 16TH, 2017:
The 1929, 1966, 2000 and 2007 market tops are forming some fascinating geometrical and golden mean relationships
with each other into the third week of August, 2017.
December 30TH, 2016:
November 6TH, 2016:
The highest five day total of hits on my Panic Scale occurs in the few days after the election. Coincidence
or hidden order?
October 23RD, 2016:
Here's the Bottoms Indicator for the entire year with S&P 500 results. You can see that the January/February
cluster of lows coincided with the market correction at the beginning of the year. The all-time high for the
SPX on 8/15 coincided with the 8/18 extreme top in the indicator. Interestingly, the midpoint of the 8/15 and
8/23 retest intraday SPX tops falls exactly on 8/18 in trading days. The area in the chart between the red lines
is mostly noise and attributed to the partly random nature of the markets. What we're really interested in are
those extreme readings outside the red lines because that's the area where randomness yields to predictability.
The extreme low reading for 2016 is coming up on 12/9.
October 2ND, 2016:
The Panic Scale has been uploaded for the fourth quarter. The second week in October and Thanksgiving
weekend show the highest spikes on the scale for the fourth quarter. The 9/29 spike coincided exactly with
reports that hedge funds were pulling out of Deutsche Bank, igniting fears of another 2008 style banking
crisis. The market quickly recovered the next day but this may be a continuing theme over the next few weeks.
September 9TH, 2016:
Major indices were down over two percent today. September 12th is the most extreme reading on my
Panic Scale for the second half of 2016.
June 18TH, 2016:
I've updated the Panic Scale for the third quarter and the Bottoms Indicator for the second half of 2016 (see links).
May 31ST, 2016:
The next date of interest on my Panic Scale (see link) is June 3rd. More interesting, though, is that the very next
trading day, June 6th, exhibits the same trading day signature that also occurred on October 9th, 2008 at the height of the 2008
stock market crash. The signature doesn't always produce a crash but it doesn't happen very often and the odds of it coinciding
exactly with the crash and being attributed to chance is very slim. The Panic Scale is derived from calendar day relationships and
forces between stock market panics but when these forces act upon traders and are translated into actual trades by traders within the
confines of trading days, certain predictable patterns may emerge to warn traders of impending danger. If the trading day signature
was not a coincidence in 2008, it is warning of another potential crash the week of June 6th.
MAY 1ST, 2016:
The 1929 Panic Spiral. A spiral linking the 1929, 2000 and 2015 panics is anchored to the anniversary of
the 5/6/2010 "Flash Crash." That May 6th, 2010 panic was also the product of cycles and was predicted by myself,
as shown in the second chart below which I originally published in 2010.
Also, it is interesting to note that 5/2/2016 forms a perfect golden mean ratio of trading days between the panics
of 10/19/87 and 8/31/1998.
APRIL 16TH, 2016:
The market has rallied right into the big 4/17 turn on my bottoms indicator. The market ignored
the March turns but, if the indicator is back on track, the market should be down from now into June.
MARCH 31ST, 2016:
The April Fool's Day Panic Spiral. A Fibonacci spiral linking the 1987, 1998 and 2015 panics is anchored to April Fool's Day.
MARCH 19TH, 2016:
The panic scale has been updated (see link) and April 4th is the next date of interest. The rally off
the 2/11 lows has extended futher than anticipated but the big bottoms date of 3/24 on the bottoms
indicator looms large. Next week could be very rough if the bottoms indicator exerts its influence.
MARCH 4TH, 2016:
My interpretation of market action is that the market made an important top today right into the 3/5
spike on my Panic Scale and 3/6 top on the Bottoms Indicator. These two indicators confirm that
we may have seen an important emotional extreme in bullish optimism this past week and a new leg
down in the bear market is about to begin. Short-term, there is now a lot of downward pressure on
the market into March 24th.
MARCH 3RD, 2016:
The Bottoms Indicator has a top on 3/6 and the Panic Scale has a panic spike on 3/5. So far, the Bottoms
Indicator is prevailing.
FEBRUARY 22ND, 2016:
The rally off the 2/11 low looks a lot like the rally in 1929, just prior to the crash. The highest reading on my
panic scale for all of 2016 occurs on March 5th (see panic scale). This may just be a coincidence but it is lining up
eerily with market action in 1929. Since the panic scale is calculated years in advance, it is not a case of just waiting
for the market to start selling off and then "jumping on the bandwagon" at the last minute to predict a stock market
panic. The indicator precedes stock market activity so, when I see the market echoing crashes in the past around my
important panic dates, I pay attention and give it more weight. There was a 2/20 spike on my panic scale this past
weekend which resulted in a nearly eight percent rally (intraday) in a little over a week. If the market reverses soon
and takes out the 2/11 lows, it will be a confirmation that we could see a panic into the weekend of 3/5.
FEBRUARY 5TH, 2016:
The tulip echo continues. 379 years ago today, February 5th, is the actual day the tulip trade was first supended.
According to Earl Thompson, author of "The Tulipmania: Fact or Artifact?", word of a possible trading suspension
reached traders on February 2nd and 3rd, after which prices sagged until the actual suspension of trading at the
market center of Alkmaer on February 5th, 1637.
An index of tulip prices was created by Thompson (shown below).
From 2/3 to 2/9, the tulip index lost approximately 25% of its value and it is estimated that the index lost 90% of
its value within six weeks. Now, there were extenuating circumstances for the intensity and magnitude of the 1637
decline, related to futures and options trading, and I'm not predicting a ninety percent decline in six weeks; but the
cyclical parallels to the bursting of the tulip bubble, along with my Market Bottoms and Panic Scale indicators, make
the next several weeks a very dangerous time for world stock markets.
FEBRUARY 2ND, 2016:
The Tulip Echo. 379 years ago today, one of the greatest speculative manias in history, the Dutch Tulip Mania
came to an abrupt end. This may not be a coincidence as there are parallels and cyclical relationships with the
current stock market. Tulips were introduced to the Netherlands in 1593 and quickly gained popularity. Growers
couldn't keep up with the demand and, as a result, speculators entered the market. Bulb prices rose steadily
through the 1630's and peaked in late 1636 and early 1637. Near the end, the mania drove Dutch traders to
irrationality. People began trading anything--money, property, animals--for tulip bulbs. Incredibly, at peak levels,
a single tulip bulb could sell for the price of a luxury house.
Then, on February 2nd, 1637, the tulip mania suddenly collapsed. As Michael Pollan described it in his book, The
Botany of Desire: "On February 2, 1637, the florists of Haarlem gathered as usual to auction bulbs in one of the
tavern colleges. A florist sought to begin the bidding at 1,250 guilders for a quantity of tulips--Switsers, in one
account. Finding no takers, he tried again to 1,100, then 1,000...and all at once every man in the room--men who
days before had themselves paid comparable sums for comparable tulips--understood that the weather had changed.
Haarlem was the capital of the bulb trade, and the news that there were no buyers to be found there ricocheted
across the country. Within days, tulip bulbs were unsellable at any price. In all of Holland a greater fool was no longer
to be found."
JANUARY 30TH, 2016:
The rally continues. Friday's rally was the biggest up day in nearly five months and coincided with the
1/30 spike on my panic scale, resulting in a buying panic. There was also a surprise announcement by
the Bank of Japan to cut interest rates below zero on Friday, shocking many investors. These types of
surprise announcements often have a way of coinciding with spikes on my panic scale. Recall that China
shocked the financial world on August 11th by devaluing the Yuan on the exact date of the 8/11 panic
spike. The Bottoms Indicator says the market turns back down next week and downward pressure on
the stock market increases until 2/20. There is also a 2/20 spike on my Panic Scale, as well.
JANUARY 22ND, 2016:
Nice rally today with world indices up between two to six percent! Here's another view of my Bottoms
Indicator with the S&P 500 for January overlaid. I've merely reversed the bottoms indicator so that
extreme bottom readings appear on the bottom of the chart instead of the top, as it is less confusing
when graphing the market over the indicator. The market found a bottom between the 1/15 and 1/21
cluster and rallied five percent off its intraday lows into today's close. The rally should continue into
next week, and the Federal Reserve announcement on Wednesday, but I have a lot of danger signals
near the end of next week and the first few days of February (along with a 1/30 spike on my Panic Scale)
which should turn the market back down to test (or exceed) the January lows.
JANUARY 15TH, 2016:
The major indices declined to five months lows today, right into the major 1/15 date on my Bottoms
Indicator. The dates on this indicator can be calculated years in advance and they are published
here months in advance so it's always fascinating when the market sells off into these dates. Looking
ahead, if the market continues to decline past the 1/15 lows next week, it will be in serious trouble
as there are many panic signatures present over the next few weeks. The next major spike on my
panic scale (see panic scale) is on 1/30 but there is a smaller spike on 1/18 which may have contributed
to today's two percent sell-off.
JANUARY 7TH, 2016:
Another day, another trading halt in China. After just 29 minutes of trading, and a seven percent
decline, authorities were forced to close the stock market for the second time this week. The "circuit
breakers" did not have the desired effect and, just four days after being introduced and trillions in losses,
the Chinese authorities said "My bad" and supended the circuit breakers. The next important turn on
my Bottoms Indicator is 1/15 but the current background and climate is very similar to the August Panic
and we may see outright panic in markets outside China within the new few days.
JANUARY 4TH, 2016:
Major world indices were down 1.5 to 7 percent today to start the new year. Traders in China apparently
couldn't wait to try out the new circuit breakers, which went into effect just today, and tested them more
than once. Panic was in the air.
JANUARY 3RD, 2016:
I've updated the Panic Scale and Bottoms Indicator charts for 2016.The most interesting
observation to be gleaned from these charts is that the three spikes on the panic scale
(on 1/30, 2/20 and 3/5) also match the extreme readings on the Bottoms Indicator
(on 2/1, 2/20 and 3/6) within one day. These two charts are calculated independently
from completely different data sets and the fact that they exhibit extreme readings on the
same dates may indicate enhanced confirmation of the importance of these dates.
JANUARY 2ND, 2016:
Happy New Year! No panic activity in the market during the last two weeks of the year,
however, the Dow and S&P 500 closed the year lower, confirming the research on this site
indicating that a bear market began in 2015 (and in 2014 for the Dow Transports, which is
currently approaching a twenty percent decline from its highs). The outlook for 2016 continues
to be that a bear market is in progress, unless the Dow and S&P500 can prove otherwise by
exceeding their 2015 highs.
DECEMBER 17TH, 2015:
The November 3rd top is still holding and the last two weeks of the year have numerous
panic signatures, in addition to the 12/25 spike on the Panic Scale. The 12/25 spike also
has many similarities to the 5/29/15 panic spike, which coincided with the panic in Asia
and Europe (see the Mahoney Panic Scale link for details). In short, the last two weeks
of 2015 are probably going to be ugly for the stock market.
NOVEMBER 12TH, 2015:
Nice time symmetry between the 2000, 2007 and 2015 (so far) bull market tops. Both
the March, 2000 and May, 2015 tops were followed by failed attemps to make new highs
five and a half months later. The recent three standard deviation, buying panic rally right
into the major November 5th panic timeframe failed to take out the important May highs.
These types of rallies are typically followed by strong corrections and panic selling in the
opposite direction so it looks ominous for the market into the upcoming holidays.
NOVEMBER 3RD, 2015:
The rally is now exceeding three standard deviations. Something big is indeed brewing into
the major 11/5 panic timeframe (see Mahoney Panic Scale).
OCTOBER 31ST, 2015:
It's Halloween so I'm going to tell you all a scary story. The October rally has exceeded two standard
deviations heading right into one of the biggest and most interesting spikes I've ever seen on the Panic
Scale. One component of the November 5th date has numerous links to the crash of 1929. To put it
in perspective, the only other date that comes close in this category is the "flash crash" on May 6, 2010,
which had about half as many relationships to 1929. My opinion is that the market sells off hard next
week with possible panic selling but, since we're only four trading days away from November 5th, it is
not out of the question that the market could continue to push the upper limits of standard deviations
for a few more days before taking the plunge. Next week should be memorable and, possibly, very scary.
OCTOBER 4TH, 2015:
How does it know? On September 30th, I made public the updated Mahoney Panic Scale showing the largest
spike of the year on November 5th. The next day, Treasury Secretary Jacob Lew informed Congress that
the government will run out of money to pay its bills sooner than expected...on November 5th.
SEPTEMBER 30TH, 2015:
The Mahoney Panic Scale for the fourth quarter of 2015 has been posted.
SEPTEMBER 20TH, 2015:
Here's a magnified view of the Mahoney Bottoms Indicator for the second half of 2015, which was published
here back in May (and is actually calculated years in advance). This view shows August thru October and may
give some guidance on what to expect into October. The rally off the 8/25 closing panic low appears to have
peaked right on the 9/17 extreme low reading on the bottoms indicator for September. This implies that the
market will now sell off into the October 10th autumn peak in the bottoms indicator.
SEPTEMBER 9TH, 2015:
The ghost of 1929. The stock market is replaying the 1929 crash, shown most clearly in the Nasdaq index.
September 14th is the most likely day for a world-wide panic. The next spike on my panic scale is September 15th.
AUGUST 27TH, 2015:
Another strong rally and the biggest two day percentage gain (over six percent) for the major indices since
2008/2009. This is consistent with my indicators. From here, the most likely path for the market is a couple
days of consolidation, or a minor pullback, followed by one more big rally day around the middle of next week
which marks the top of this rally before the market heads back down throughout September.
AUGUST 26TH, 2015:
There it is! The biggest "up" day in nearly four years today. I was a little early on the exact timing of the big rally but
all's well that ends well. It has been a roller coaster ride the last few days but, in the end, the major indices made
their panic intraday lows at the open on 8/24 and their closing lows exactly on the Mahoney Bottoms Indicator date of
8/25 (see Mahoney Bottoms Indicator link).
AUGUST 24TH, 2015:
Well, it wasn't pretty and not exactly the way I envisioned it, but anyone brave enough to buy the open
today has a nice profit and caught the panic intraday low I expected for today, within one trading day
of the spike on my panic scale and within one trading day of the low on my Bottoms Indicator. The major
indices had a five percent intraday rally off the lows today but my forecast for the largest "up" day of the
year, today, will also probably be one day off and occur tomorrow, August 25th. The market should continue
to rally strongly for a few days before turning back down. I'll have more to say about the dangers awaiting
the market in September in the coming days.
AUGUST 23RD, 2015:
Who's ready for a rally tomorrow?! The Sunday overnight S&P 500 futures are down hard as I write this,
however, I'm not expecting a crash tomorrow. There may be a lot of volatility, with some scary intraday
plunges tomorrow but, by late afternoon, it should become apparent to traders that the stock market is not
going to crash and I expect there to be a huge rally in the last couple hours, resulting in possibly the biggest
"up" day of the year. There is also a bottom due on the Mahoney Bottoms indicator for August 25th (see link)
and the intraday lows made during tomorrow's expected volatility will fall within one day of that target and
should satisfy the forecast.
AUGUST 21ST, 2015 (P.M.):
Right on schedule with a three percent down day on August 21st.
AUGUST 21ST, 2015 (A.M.):
It's time. The stock market cannot escape its fate.
AUGUST 20TH, 2015:
No recovery into the close and the worst down day in over a year. Market action is consistent with my forecast
for panic selling into 8/21. We could see a three to six percent down day on August 21st.
AUGUST 20TH, 2015:
The "Final Destination" plot thickens. Our protagonist, the U.S. stock market, after breathing a sigh of relief that
it did not suffer the same terrible fate as the rest of the world last week, is starting to get the uneasy feeling that
all is not well. Watch today's last hour of trading closely. If the market can't recover and sells off into the close,
there's a pretty good chance that there's going to be a waterfall decline and panic tomorrow, 8/21.
AUGUST 16TH, 2015:
For the first time in several months, my very short term trading day cycles (down to the hourly and minute charts)
turn negative this week and will become increasingly negative over the next several weeks, putting the micro-cycles
in sync in a downward direction with the larger calendar day macro-cycles shown elsewhere on this site. Also, of
note, is that supporting cycles indicate that August 21st may be more important than originally shown on the
panic scale (see chart below). There is a bottom due on the Mahoney Market Bottoms Indicator on 8/25 which is
closely tied to possible panic activity around 8/21.
AUGUST 12TH, 2015:
Final Destination meets Dead Man Walking. Stock markets around the world were mired in a sea of red all day with most
indices closing down between one to four percent after the China Yuan devaluation. The U.S. market, however,
amazingly pulled itself back from the edge of the abyss, once again, today and managed to actually post a higher
close in the S&P 500. In the film, Final Destination, the protagonists cheat death after one of them has a premonition of a
plane exploding and they disembark before the plane takes off and explodes. All is seemingly well until, one by one,
each of the characters is subsequently killed in ever more gruesome accidents as death reclaims those who managed to
escape their fates. The stock market cannot escape its fate either and the universe generally unfolds about the way it
should in the end.
AUGUST 11TH, 2015:
Putting it all together. I've shown the importance of the May 20th top from a historical perspective and the 9,000 day cycle. July
31st, 2015 was the most important cycle date in 25 Years, based on my proprietary low to high, high to low, low to low and high
to high cycles. The bull market death spiral (see link) has accurately predicted the exact date of the all-time high in the Dow Transports,
a leading economic indicator, currently over ten percent off all-time highs. Now, China has shocked financial markets with a currency
devaluation on the exact date of the peak in the Panic Scale on August 11th (see Mahoney Panic Scale link), sparking fears of igniting
a currency war that could destabilize the global economy.
The May 19th/20th tops in the Dow and S&P 500 appear to have been the actual bull market price tops but
7/31, or August 11th, may eventually be viewed by market historians as the point at which market psychology
decidedly flipped to bearish and the markets actually started to sell off strongly...the point of recognition. This
often happens. A top is made and the market goes nowhere for months and then, all of a sudden, the collapse
comes. There are several potential market panic scenarios I am watching over the next several weeks;
one of them is the 1997 repeat (see chart below). The current market has tracked 1997 fairly closely since
the May top and a panic this week would be within a few days of the corresponding 1997 panic. That would
actually be a best-case scenario because the alternative panic scenarios over the next couple months are
much worse. Of course, if the market can find a way to make a new all-time high in the face of all these
negative influences, then I am wrong.
August 1, 2015 Update: The all-time intraday high in the Dow Transportation Average occurred at 9412.83 exactly
on 11/28/2014! This index is a leading indicator of economic downturns and appears to be in the beginning stages
of a bear market, as it is now ten percent lower than its previous high. The Dow Transportation index, along with
the Dow Industrial Average, are the two indices used in one of the oldest stock market timing systems, Dow Theory.
Under Dow Theory, the further these two indices get from their highs, the closer it gets to signaling a bear market
11/30/2014: The 1966, 2000 and 2007 bull market tops are on a phi spiral linking the 1966 bull market top to Thanksgiving week of
2014, along with many important market turns in 2014. See chart below for more detail.
The Thanksgiving "Triple Triple" and Bull Market Death Spiral - A Possible End to the Bull Market.
Thanksgiving Day, 2014, had a rare "Triple Triple." On this day, there was a convergence of several repeating top to top time segments. The distances between prior market tops has occurred three times to the exact day for each time segment (see below). Widening the time window by two calendar days, yields additional top to top segments but I've just included the exact examples below. In addition to the Triple Triple, the last week of November has ten symmetry hits from prior market turns (both highs and lows) on a monthly basis. These symmetry hits are equal distances between previous market turns going back to the 1800's. There's a tendency for there to be clusters of previously seen time segments at important market turning points. Additionally, The Mahoney Panic Scale (see link) has mid-December as a potentially dangerous time period for the market. Last, but not least, is the death spiral out of 11/28/2014 (see above) linking the bull market tops of 1966, 2000 and 2007.
November 27th, 2014 has three repeating top to top time segments: 25019, 5573 and 3619 calendar days
11/27/2014 - 12/30/2004 High = 3619 days
10/9/1906 High - 11/19/1896 High = 3619 days
12/17/1915 High - 1/19/1906 High = 3619 days
9/1/1989 High - 10/5/1979 High = 3619 days
11/27/2014 - 8/25/1999 High - 5573 days
9/5/1899 High - 6/2/1884 High = 5573 days
5/29/1946 High - 2/24/1931 High = 5573 days
11/27/2002 High - 8/25/1987 High = 5573 days
11/27/2014 - 5/29/1946 = 25019 days
8/25/1999 High - 2/24/1931 High = 25019 days
3/8/2001 High - 9/7/1932 High = 25019 days
9/7/1926 High - 3/8/1858 High = 25019 days
9/9/2005 High - 3/10/1937 High = 25020 days