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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.

A Sunday Chart

chris — Sun, 12 Oct 2008 16:02:49 +0000

I made this chart today for the report I’m working on, but it just begged to be posted on the blog now.

click chart to enlarge

What else do you need to know?

Right & Wrong at the Same Time!

chris — Mon, 29 Sep 2008 16:28:59 +0000

Overhearing people talking about the market these days – the catch phrases that stand out are ‘you can’t time the market’ – and – ‘I’m in for the long-term’ – and – ‘in the long run, prices go up.’

Here’s a monthly chart of the S&P 500, which right now is at 1163. The chart shows how the S&P could fall to 650 in the next two years and still ‘go up in the long run!’ Such a decline would represent a 44% drop from today’s values, and a stunning 59% drop from the all-time highs. So yes, the ‘buy for the long-term’ crowd might be right, but are they prepared for the wrong that will be done to their portfolios in the meantime?

click chart to enlarge

The Currency Mask Falls

chris — Wed, 13 Aug 2008 04:56:54 +0000

The June 29 Special Report, Inflation, Deflation & Youflation, made the following point.

· …[The] Deflation is masked by the falling dollar. We are experiencing long wave winter through the lens of a falling currency. This environment is 180 degrees opposite from the 1930s where long wave winter occurred during a period of a strengthening currency….
and
… I think the deflation side will win out, because economic winter is the overarching environment. Whenever the dollar is able to find a temporary low, then oil and corn prices will turn down

Later in that report, the date of the turn in oil was pinpointed. Long-term readers of my research know that I believe the most important market turns are accompanied by the most dramatic changes in emotion. Just weeks ago, it seems like ‘inflation’ was the buzzword on so many market participants lips. Oh, what a dramatic change we’ve seen in one short month!

Tonight I am showing two charts to make a larger point about how deflation has been hiding behind the mask of the falling dollar, and now that mask has fallen away. The weekly charts below show both the DowJones-AIG commodity index and the euro. Notice how the euro’s fall (dollar rally) is relatively small compared to its trend from the beginning of 2006. The uptrend in the euro has not broken. And yet this relatively small euro decline/dollar rally has unmasked a big drop in the commodity index!

I think these charts suggest a couple of themes. One is that there can be a lot more destruction in commodity prices, as it doesn’t seem to require large dollar rallies to push oil, corn, gold etc lower. And that one need not necessarily be a dollar bull here to believe the commodity bull market is over.

I’m just planting some early seeds of ideas here, ones that I’ll track closely in the months ahead. As I already have with regular commentary on recent gold and oil weakness. But it’s in comparing these two charts together that suggests that the downward force in commodity prices is not 100% attributable to a dollar rally, and so we should look to other forces, and that’s where the long wave winter discussion in that June 29 report becomes so important.

click chart to enlarge