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A Spiral Calendar Idea

ChrisC — Mon, 08 Aug 2011 00:09:34 +0000

Presented within…

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October Thoughts – Part 1

ChrisC — Mon, 04 Oct 2010 16:26:59 +0000

Some thoughts on the potential for market turns this month, both long-term and intermediate-term.

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Part 2 of October Thoughts will look at shorter-term stock market relationships.

The Stock/Bond Conundrum

ChrisC — Sun, 08 Aug 2010 01:31:39 +0000

Many seasoned and saavy Wall Streeters are perplexed by the apparent conundrum of a strong bond market that seems to be telegraphing deflation and recession and a stock market that seemingly proposes a very different scenario has it levitates with no apparent rhyme nor reason.

This public post (open to non-subscribers) outlines my thoughts on the dollars role as the answer to this conundrum. I’ll follow this post up in the next few days with additional thoughts on the inflation/deflation cycle and how it fits into our timing model(s). Those posts will be for subscribers only.

The answer to the conumdrum is that I think bonds and stocks are both accurately reflecting aspects of the current financial climate.

Bonds are accurately reflecting that market’s position late in the deflation cycle. This is self-explanatory and needs no exposition here.

Stocks are accurately reflecting currency uncertainty and future dollar irrelevancy that is the natural by-product of the trillions injected via QE following the 2008 crash.

A phrase I first coined in the 1990s and have repeated ad nauseum since is;
“If the dollar goes to zero, stocks will go to infinity and investors will be broke anyways.”
A bit of hyperbole, obviously, but it makes the point.

World equity markets are inflated by trashing the dollar. If the dollar is allowed to rise, then we see equity markets become unstable and begin to fall. That’s been the tendency since 2008.

click chart to enlarge

The chart above shows the link between the dollar and stock trends over the past two years. The 2008 stock crash occurred during a massive dollar rally. The dollar fell briefly in late 2008 at which point stocks quickly stabilized. The dollar rally resumed in early 2009 as did the stock collapse. The stock low in March 2009 was coincident with the dollar top (point #1). The falling dollar in 2009 went hand-in-hand with the stock market rally. Eventually, the dollar began to correct upwards while the stock rallied maintained its upward momentum. But when the dollar rally’s momentum accelerated at point #2 on the chart, stocks began to head south. The momentum low in stocks in the second quarter was coincident with the dollar high. Stocks’ price low occurred shortly thereafter. Stocks have been rallying since against a back drop of a dollar that is once again falling sharply.

click chart to enlarge

This second chart shows the stark contrast of the S&P 500 prices in dollars versus priced in gold. The question about the massive disconnect between the bond and stock markets is answered simply here.

The bottom clip of stocks priced in gold is exactly what one would expect given the current state of the bond market and its deflationary expectations.

The answer to the pain of deflation is a falling currency. In a deflationary world, the weakest currencies feel the least deflationary pain. Ergo – the falling dollar enables U.S. stock holders to escape the deflation pain. U.S. stock holders think they’ve recouped much of their 2008 losses. But the pain has just been kicked into the future to that point in time when the longwave inflation/deflation cycle flips to the inflation side. Then, the weak currencies will feel the maximum pain and the strong currencies will reap the rewards. I’m sure we can expect the Chinese to let the yuan float higher when that day comes.

Let’s Look at These Charts I Published 8 Years Ago or The Long-Term Picture

ChrisC — Thu, 20 May 2010 22:12:41 +0000

3rd Alternate Title – Thinking Outside the Rhomb!

What’s going on in the big picture? What’s the long-term implications of what we’re seeing now?

Yes, Let’s look at these charts I published eight years ago. And while we do it, lets remember that the vast majority of analysts wouldn’t want you to look at their work from eight years ago, nor did that work have anything relevant to say about what’s going on now.

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Some Additional Long-Term Charts

ChrisC — Sat, 23 Jan 2010 18:16:11 +0000

Here are some more long-term charts for gold, oil, oil priced in gold, and the S&P 500 priced in gold.

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The Big Picture – How Low?

ChrisC — Fri, 22 Jan 2010 22:17:14 +0000

There’s an old saying that if you forecast time, you shouldn’t forecast price and vice versa. I’m a ‘time guy’ obviously. But we can provide a long-term ‘guesstimate’ for where prices could be when our time target rolls around.

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Octobers – A Spiral Calendar Discussion

chris — Tue, 04 Aug 2009 00:25:34 +0000

I think they best way to apply the Spiral Calendar to current movements is a ‘top down’ approach. That is looking at the biggest forces and dates on the horizon and then zeroing on the smaller details. October 11, 2007 saw the second of the ‘twin peaks’ along with January 2000, that marked the paired tops of the long-wave autumn period. Around October 10, 2008 was arguably the point of maximum freefall during the Panic of 2008. It was the time when there really were no bids available, although the VIX measurement of investor fear would continue to climb into the lunar ‘dark days’ period two weeks later.

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Wednesday’s Eclipse

chris — Tue, 21 Jul 2009 00:28:33 +0000

I’ve been asked about Wednesday’s eclipse, and its relevence to the markets. I’m making this a public post available to all blog readers. About 10 years ago, I did research into eclipses. It was an outgrowth of my participation in the Colorado LongWaves group, which was a dynamic discussion group with some serious mental horsepower present, until it degenerated into the usual intenet food fight. I met Tom Drake, who posts comments on this board, at that time. I was spurred in my research by an exchange with Arch Crawford, who posited that an upcoming eclipse was important because it had some relationship to some or other planetary angle. Now I don’t think planets have anything to do with the markets. But it seemed to me that if eclipses had an effect, then that effect should be stronger on those eclipses that featured a more precise alignment of sun/moon/earth. In astronomical terms, the alignment is measured as the ‘gamma’ of the eclipse, which is how close the eclipse shadow comes to the center of the earth (not the equator, but the center – and the equator is the center on the equinoxes.)

Now the short version (for the non-pay part of the site) is that I discovered that those saros cycles closest to zero gamma do seem to figure in the long-wave cycles. Solar eclipse saros cycles approaching zero gamma seem to relate to major, secular long-wave tops and lunar eclipse cycles near zero gamma have the same relation to long wave lows. A third relationship is a ‘panic necklace’ of cycles where eclispes past the zero value relate to panic years.

The interesting conclusion of this work was that secular market long-wave turns were not single events, but were usually double-tops or double-bottoms separated by 7 to 8 years. That phenomenon was a manifestation of the eclipse cycles. The saros cycle is 18 years and the each consecutive saros is separated by an average of 29 years. The turns occur on alternate saros (36 years). The presence of two cycles on consecutive saros results in the 7 to 8-year double top or bottom (36 years – 29=7).

The original forecast made in the late 1990s was for double tops in 2001 and 2009. This eclipse on Wednesday is the second eclipse in that gamma central series. The first chart below shows the expected high and low years based on my hypothesis and the below is the reality as it has played out. The third chart shows my forecast based on this model made in 2004 that there would be a second top that paired with the 2000 top occurring 7 to 8 years later. That forecast was, of course, correct.

Wednesday’s eclipse belongs to the same series that occured in the important top years of 1901, 1937 and 1973. Ultimately, the Spiral Calendar is a key ingredient for the exact timing of the market turns, not the eclispe. Wednesday’s eclipse is not expected to form an important top, but it is part of a cycle mechanism that governs the current position in the economic long-wave. The understanding of these cycles allowed me to forecast the transistion from economic autumn (mild deflation and rising stocks) into economic winter (deflation and falling stocks.) My analysis of eclipse cycles was more accurate in determining that transition than other more well-known forecasting methodologies.

So yes, Wednesday’s eclipse is very important from a long-wave cycle standpoint, but it will not necessarily mark a precise market turn. Nonetheless, it is a topping force at work, and with prices rising somewhat strongly into this time period, a reversal on the eclipse is possible

click chart to enlarge

Peter Schiff: Stimulus Bill Will Lead to “Unmitigated Disaster”

chris — Mon, 09 Feb 2009 03:02:09 +0000

The fiscal stimulus bill being debated in Congress not only won’t help the economy, it will make the recession much worse, says Peter Schiff, president of Euro Pacific Capital.

Schiff scoffs at the notion the economic decline is starting to level off and concedes no government action means a “terrible” recession. But the path of increased government intervention will lead to “unmitigated disaster,” says Schiff, who gained notoriety in 2007-08 for his prescient calls on the housing bubble and U.S. stocks.

The problem, he says, is the government is trying to perpetuate a “phony economy” based on borrowing and spending. With the U.S. consumer tapped out, the government is “now taking on the mantle” of consumer of last resort, he continues, predicting the bond bubble will soon burst – if it hasn’t already – ultimately leading to a collapse of the dollar and an “inflationary depression worse than anything any of us have ever seen.”

If nothing else, Schiff is an nonpartisan critic of American policymakers, comparing President Bush to Herbert Hoover and President Obama to FDR, and neither in a favorable way.

Video interview here.

Shallows & Miseries – Low Tide in the Affairs of Men

chris — Sun, 26 Oct 2008 18:08:49 +0000

“There is a tide in the affairs of men.
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.”

Shake-speare: Julius Caesar Act 4, Sc. 3.

There’s been some ‘buzz’ in the media and on the internet about the ‘lunar calendar,’ some of it more helpful, some of it less. There’s also quite a bit of new traffic coming to the site, (Hello, Poland!) so it’s a great time to specifically outline what is and is not occurring in the market right now.

One person’s blog linking to this site has an entry titled, “Another Crash Caller: Chris Carolan.” Say what? I am not calling for a crash. The crash is over. It’s in the rear view mirror. Where We Are is at the point of maximum panic right now. In fact, that point most likely passed within the last few hours, if we take the average of the low points of the previous panics and crashes of 1929, 1987 and 1997 as our guide. This is low tide in the affairs of men right now!

The VIX index is as pure a measure of human trader’s ‘fear’ level as any I know. The VIX reached a new high for this panic on October 24 of 89.58. It’s possible early Monday sees a higher level, but after that VIX should fall indicating the point of maximum fear precisely fell on the dates calculated by my Autumn Panics research.

I am not telling people to get long the market here. My June 2008 report outlines the path I believe the bear market will follow in coming years, and there’s plenty more trouble ahead. If you haven’t read that report, it is still very timely. Passing the point of maximum panic right now does not insure that the cascading nature of selling will end now. Lower prices beget margin selling which beget lower prices etc. It’s possible that there is still more of that forced selling that must occur regardless of the phase of the moon.

Nonetheless, I am saying that the level of fear, and widespread fear is the very definition of panic, will begin to abate next week. The highest VIX reading of the year should be right now. Friday morning’s 89.53 high is likely peak reading for the Panic of 2008.

click chart to enlarge

I’m receiving a lot of questions in my mailbox about the Solunar Model. I’ve discussed how it’s made in old issues (now unavailable) of Calendar Research Reports, but I’m not going to detail it here. Primarily because I don’t want to highlight the Solunar Model as some type of ‘answer’ – it’s not. The model is doing very well right now specifically because the markets are so emotional. The model shows the emotional track of the market. Because one of the component years for this year’s model is the Asian panic year of 1997, there is more than the usual amount of ‘replay’ to history right now. Cycle students will note the 11-year span from the Asian Panic of 1997 to the panic of 2008 is what the Greeks called the hendekas. The Spiral Calendar text book shows how the October mini crash of 1989 was an 11-year replay of the ‘October Massacre’ of 1978.

There’s also been questions about the November Spiral Calendar turn date mentioned in the June report. It’s really best to not attempt to figure out those dates before they arrive. It’s preferable to rely on one’s best analysis of the market at any given moment and then when that time comes, measure the emotional state of the market to see if that date has a relevent effect.