STOCK MARKET CRASH ALERT
J. Adams
August 24th, 2005
The Spirit Of Truth Page
http://www.spiritoftruth.org
--------------------------------------------------------------------------------
"....a lunar (eclipse) full moon close to solar eclipses, in particular, seem to be the triggering device that allows for the rapid transformation of investor psychology from manic greed to paranoia.."
- Peter Eliades' online "Current Observations"
--------------------------------------------------------------------------------
Over the past couple of years the DJIA appears to have been topping above the psychologically critically 10,000 mark:.
It was in late-August of 1987 when the stock market topped prior to the crash of that year. There is reason to believe that a similar market pattern is about develop with the stock market reversing from here into a selling climax into late-October. More specifically, over the next two months we are entering the window for a potential stock market crash based upon a remarkable discovery by market analyst Steve Puetz:
--------------------------------------------------------------------------------
- THE OCTOBER 17th LUNAR ECLIPSE -
Steve Puetz discovered that almost all of the largest stock market crashes in history have occurred around the time of a lunar eclipse.
See -
http://www.internetnews.com/bus-news/article.php/783611
Consider the following excerpt from Peter Eliades online "Current Observations":
We seldom use much newsletter space for the ideas of others, but the theories we are about to present fit together so well, we believe you will find them as interesting as we do. The two researchers are Steve Puetz (pronounced "pits") and Chris Carolan. Chris just won the 1998 Charles H. Dow Award for his original research and the complete article is offered on his website at
http://www.calendarresearch.com . The research by Puetz was first noted in our October 10, 1995 newsletter. Here is what we wrote:
"Puetz attempted to discover if eclipses and market crashes were somehow connected. Without discussing our own opinion on the potential connection between astronomical configurations and market timing, let's simply relate to you the basic findings discussed by Puetz. He emphasized that he is not contending that full moons close to solar eclipses cause market crashes. But he does conclude that a full moon in general and a lunar (eclipse) full moon close to solar eclipses, in particular, seem to be the triggering device that allows for the rapid transformation of investor psychology from manic greed to paranoia. He asks what the odds are that eight of the greatest market crashes in history would accidentally fall within a time period of six days before to three days after a full moon that occurred within six weeks of a solar eclipse? His answer is that for all eight crashes to accidentally fall within the required intervals would be .23 raised to the eighth power less than one chance in 127,000."
". . .Puetz) used eight previous crashes in various markets from the Holland Tulip Mania in 1637 through the Tokyo crash in 1990. He noted that market crashes tend to be lumped near the full moons that are also lunar eclipses. In fact, he states, the greatest number of crashes start after the first full moon after a solar eclipse when that full moon is also a lunar eclipse . . Once the panic starts, Puetz notes, it generally lasts from two to four weeks. The tendency has been for the markets to peak a few days ahead of the full moon, move flat to slightly lower --waiting for the full moon to pass. Then on the day of the full moon or slightly after, the brunt of the crash hits the marketplace."
An example of a lunar eclipse triggering a stock market crash occurred in October of 1987 when a lunar eclipse on October 7th was followed by a 13-day collapse in U.S. stock prices that culminated in an all-out crash on October 19th of that year when the DJIA fell over 20% in a single day.
In 2005 there are two solar eclipses and two associated lunar eclipses: there was a solar eclipse on April 8th that will be followed by a lunar eclipse on April 24th and in October there will be a solar eclipse on the 3rd followed by a lunar eclipse on the 17th.
See -
http://sunearth.gsfc.nasa.gov/eclipse/OH/OH2005.html
The April eclipses were not associated with a stock market crash, but it is possible that the October eclipse will be. This is particularly so given stock market seasonality. As is widely recognized, the stock market has a tendency to fall during "the fall":
New York Stock Exchange: Worst Single-Day Declines
(Dow Jones Industrial Average, percentage change)
Percentage
Date Decline
__________________________________________
October 19, 1987 -22.6%
October 28, 1929 -12.8%
October 29, 1929 -11.7%
November 6, 1929 -9.9%
August 12, 1932 -8.4%
October 26, 1987 -8.0%
July 21, 1933 -7.84%
October 18, 1937 -7.75%
October 27, 1997 -7.16%
October 5, 1932 -7.15%
September 24, 1931 -7.07%
As can be seen in the table above, nine of the eleven largest one day percentage declines in the DJIA occurred in October or just before and after that black month. Is this pattern about to repeat? If so, the stock market crash will likely ensue after the DJIA breaks below 10,000.
--------------------------------------------------------------------------------
- THE HISTORICAL PATTERN OF DOW THOUSAND MARK PSYCHOLOGICAL BARRIERS -
Historically, when the major stock averages, and the DJIA in particularly, reach or trade around psychologically important round numbers like thousand marks, the stock market may top-out and, failing to hold near or above the mark, sharply reverse course. A remarkable feature of these stock market reversals at thousand marks in the DJIA is that they are often associated with negative news that follows the market top.
For instance, on September 6th of 2001, the DJIA fell decisively below the 10,000 mark , THEN September 11th occurred driving the market down sharply.
Thus, when the DJIA reversed decisively from 10,000 in September of 2001, the breakdown in Western confidence manifested as the literal collapse of a key symbol of Western financial prowess and American global economic hegemony....the World Trade Center towers in New York City. Likewise, a blow occurred against the Pentagon in Washington DC, the symbol of American global military hegemony.
There are other major examples of significant negative historical events erupting in conjunction with reversals from key thousand marks in the DJIA.
Right after the DJIA failed at Dow 8000 in late-October of 1997, a mini-crash occurred in association with a financial panic in Asia.
In 1997, the Dow reversed from the 7000 mark and the Fed raised interest rates for the first time since 1994 up to that point leading to a ten percent market correction.
Likewise, when the Fed hiked interest rates in 1994 precipitating a year-long correction in the stock market, it occurred right after the Dow reversed from the 4000 mark in late-January of that year.
In the summer of 1990, the DJIA reversed from 3000 and THEN Iraq invaded Kuwait, thereby triggering a Persian Gulf crisis and major oil- shock that caused the world economy to slip into a recession and stock prices to plunge by 25 percent. Notably, the DJIA topped by closing two days in a row at exactly 2999.75 on July 16th and 17th of that year (did not close above 3000 until the following year).
Finally, between 1966 and 1982, the DJIA reversed from the "Magic 1000" barrier several times. After each reversal, all kinds of troubles emerged ranging from OPEC oil embargoes, to the Vietnam War, to Watergate. One of the most notable cases occurred in October of 1973 when the DJIA rose to just below Dow 1000 as the Arabs launched a surprise attack against Israel which, in turn, led to a major East/West confrontation and an Arab oil embargo against the West. Consequently, the world economy entered a severe contraction and stock prices plunged in the largest market correction up to that time since the Great Depression.
Given the historical pattern of major stock market reversals from key thousand marks in the DJIA, there is reason to believe that a new reversal below Dow 10,000 will be associated with a major decline in stock prices possibly triggered by some sort of historical "shock(s)" like occurred with such breaks in the past.
--------------------------------------------------------------------------------
Given that we are entering a window for a possible worldwide panic and global collapse of stock markets, it begs the question as to why?
If, indeed, a new large-scale decline in U.S. stock prices is getting underway, then what sort of events might erupt to upset investors' expectations?
Again, it could be that we are mainly dealing with an unraveling of the debt bubble that has been inflated by reckless government and Federal Reserve policies in recent years and decades.
See -
http://www.economist.com/finance/displayStory.cfm?Story_id=2461875
If so, then the stock market may now start anticipating a debt-deflation implosion in the economy that astute thinkers like Robert Prechter have been warning about for years.
See -
http://www.elliottwave.com/
Beyond the potential for a deflationary economic depression, however, what Prechter and other such long-wave theorists fail to recognize is that the social wave patterns they analyze do not necessarily unfold in a consequential manner, i.e., where a downturn in mood gives rise to the negative thinking and associated actions that beget greater upsets in collective confidence and reinforce given downtrends in collective mood. Rather, such historical wave patterns are synchronistic such that reversals and large-scale downtrends manifest as negative events collectively experienced as mass mood collapses. Accordingly, a reversal from Nasdaq 2000 and Dow 10,000 may be connected to negative historical shock(s) outside of financial markets and the economy. My concern remains for terrorism involving weapons of mass destruction and/or ultimately global nuclear war as I foresaw back in 1991.
See -
http://www.spiritoftruth.org/truth.htm