Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
Labour vs Tory Manifesto Voter Bribes Impact on UK General Election Forecast - 6th Dec 19
Gold Price Forecast – Has the Recovery Finished? - 6th Dec 19
Precious Metals Ratio Charts - 6th Dec 19
Climate Emergency vs Labour Tree Felling Councils Reality - Sheffield General Election 2019 - 6th Dec 19
What Fake UK Unemployment Statistics Predict for General Election Result 2019 - 6th Dec 19
What UK CPI, RPI and REAL INFLATION Predict for General Election Result 2019 - 5th Dec 19
Supply Crunch Coming as Silver Miners Scale Back - 5th Dec 19
Gold Will Not Surpass Its 1980 Peak - 5th Dec 19
UK House Prices Most Accurate Predictor of UK General Elections - 2019 - 5th Dec 19
7 Year Cycles Can Be Powerful And Gold Just Started One - 5th Dec 19
Lib Dems Winning Election Leaflets War Against Labour - Sheffield Hallam 2019 - 5th Dec 19
Do you like to venture out? Test yourself and see what we propose for you - 5th Dec 19
Great Ways To Make Money Over Time - 5th Dec 19
Calculating Your Personal Cost If Stock, Bond and House Prices Return To Average - 4th Dec 19
Will Labour Government Plant More Tree's than Council's Like Sheffield Fell? - 4th Dec 19
What the UK Economy GDP Growth Rate Predicts for General Election 2019 - 4th Dec 19
Gold, Silver and Stock Market Big Picture: Seat Belts Tightened - 4th Dec 19
Online Presence: What You Need to Know About What Others Know About You - 4th Dec 19
New Company Tip: How To Turn Prospects into Customers with CRM Tech - 4th Dec 19
About To Relive The 2007 US Housing Market Real Estate Crash Again? - 3rd Dec 19
How Far Will Gold Reach Before the Upcoming Reversal? - 3rd Dec 19
Is The Current Stock Market Rally A True Valuation Rally or Euphoria? - 3rd Dec 19
Why Shale Oil Not Viable at $45WTI Anymore, OPEC Can Dictate Price Again - 3rd Dec 19
Lib Dem Election Dodgy Leaflets - Sheffield Hallam Battle General Election 2019 - 3rd Dec 19
Land Rover Discovery Sport Brake Pads Uneven Wear Dash Warning Message at 2mm Mark - 3rd Dec 19
The Rise and Evolution of Bitcoin - 3rd Dec 19
Virtual games and sport, which has one related to the other - 3rd Dec 19
The Narrative About Gold is Changing Again - 2nd Dec 19
Stock Market Liquidity & Volume Diminish – What Next? - 2nd Dec 19
A Complete Guide To Finding The Best CFD Broker - 2nd Dec 19
See You On The Dark Side Of The Moon - 2nd Dec 19
Will Lib Dems Win Sheffield Hallam From Labour? General Election 2019 - 2nd Dec 19
Stock Market Where Are We?  - 1st Dec 19
Will Labour's Insane Manifesto Spending Plans Bankrupt Britain? - 1st Dec 19
Labour vs Tory Manifesto Debt Fuelled Voter Bribes Impact on UK General Election - 30th Nov 19
Growing Inequality Unrest Threatens Mining Industry - 30th Nov 19
Conspiracy Theories Are Killing This Nation - 30th Nov 19
How to Clip a Budgies / Parakeets Wings, Cut / Trim Bird's Flight Feathers - 30th Nov 19
Hidden Failure of SIFI Banks - 29th Nov 19
Use the “Ferrari Pattern” to Predictably Make 431% with IPOs - 29th Nov 19
Tax-Loss Selling Drives Down Gold and Silver Junior Stock Prices - 29th Nov 19
We Are on the Brink of the Second Great Depression - 29th Nov 19
How to Spot REAL Amazon Black Friday Bargains and Avoid FAKE Sales - 29th Nov 19
Central Banks’ Gold Buying and Repatriation Spree - 28th Nov 19
Another Precious Metals’ Reversal Coming Right Up! - 28th Nov 19
Stock Market 100% Measured Moves May Signal A Top - 28th Nov 19
Don’t Look for Investing Advice in the Media - 28th Nov 19
Why You Should Buy Trailer Park Stocks - 28th Nov 19
Will YouGov General Election Forecast 2019 be as Wrong as their REAL Forecast was for 2017? - 28th Nov 19

Market Oracle FREE Newsletter

UK House prices predicting general election result

Stock Market Imminent Seasonal Lows at Historic Times

Stock-Markets / US Stock Markets Oct 12, 2008 - 06:44 AM GMT

By: Mike_Burk

Stock-Markets The good news is: We are living through great theatre. On October 20, 1987 there were 1174 new lows on the NYSE, about 57% of the 2076 issues that traded that day, a percentage record that held until recently. Last Friday there were 2901 new lows on the NYSE, about 88% of the 3306 issues traded. New lows have been calculated with their present methodology since January 1, 1978. At the 1987 low the S&P 500 (SPX) was 33.2% off its all time high set about 6 weeks earlier. On Friday the SPX was 42.5% off its all time high set about 1 year earlier.


Technical, as with most other forms of analysis looks for similar patterns in the past from which we make assumptions about the present. Records are being set daily, there are not many similar patterns in our market history.

I read a report that someone from Standard and Poors said we had the worst period (1 week, I think) for the SPX since December 1931. From December 5, 1931 to December 14, 1931 the SPX lost 14.1%, putting it 73% below its high of September 1929. It then bounced around until March 1932 when it was about 15% above the December lows before falling 51% to its final low on June 1, 1932. A total decline of 83%. In the past 8 trading days the SPX has fallen 22.8%, about the same as the crash of 1987.

The chart below covers the period from September 1931 to July 1932 showing the SPX in red. Dashed vertical lines have been drawn on the 1st trading day of each month.

How bad is it?

In the past couple weeks Warren Buffet has given 5 Billion each to Goldman Sachs and General Electric for 10% + incentives. That makes credit card rates look pretty good.

Seasonality

Next week includes the 5 trading days prior to the 3rd Friday of October during the 4th year of the Presidential Cycle.

The tables show the daily return on a percentage basis for the 5 trading days prior to the 3rd Friday of October during the 4th year of the Presidential Cycle. OTC data covers the period from 1963 - 2007 and SPX data from 1953 - 2007. Prior to 1953 the market traded 6 days a week so that data has been ignored. There are summaries for both the 4th year of the Presidential Cycle and all years combined.

Returns for the week have been modestly positive by all measures and a little stronger during the 4th year of the Presidential Cycle.

Report for the week before the 3rd Friday of October.
The number following the year is the position in the presidential cycle.
Daily returns from Monday through 3rd Friday.

OTC Presidential Year 4
Year Mon Tue Wed Thur Fri Totals
1964-4 0.00% 0.09% -0.07% -0.27% 0.11% -0.14%
1968-4 0.04% 0.35% 0.00% 0.27% -0.01% 0.65%
1972-4 -1.04% 0.44% 0.49% -0.11% 0.86% 0.65%
1976-4 -0.40% -0.29% 0.61% -0.64% 0.37% -0.35%
1980-4 0.55% 0.08% 0.21% -0.74% -0.36% -0.27%
1984-4 0.63% -0.16% -0.07% 1.08% 0.57% 2.05%
Avg -0.04% 0.08% 0.31% -0.03% 0.29% 0.54%
1988-4 0.11% 0.32% -0.13% 0.74% -0.01% 1.04%
1992-4 0.58% 0.45% -0.04% 0.42% 0.69% 2.10%
1996-4 0.65% 0.14% -0.56% -0.72% 0.04% -0.46%
2000-4 -0.80% -2.32% -1.32% 7.79% 1.89% 5.24%
2004-4 0.46% -0.19% -0.24% -0.91% 0.45% -0.44%
Avg 0.20% -0.32% -0.46% 1.46% 0.61% 1.50%
OTC Presidential Year 4 1964 - 2004
Avg 0.08% -0.10% -0.11% 0.63% 0.42% 0.92%
Win% 70% 64% 30% 45% 73% 55%
OTC all years 1963 - 2007
Avg 0.19% -0.01% -0.11% 0.41% -0.18% 0.29%
Win% 61% 51% 48% 67% 56% 51%
SPX Presidential Year 4
Year Mon Tue Wed Thur Fri Totals
1956-4 -0.30% -0.51% -0.77% 0.17% -0.22% -1.63%
1960-4 -0.42% -0.51% -0.18% -0.72% -1.00% -2.84%
1964-4 0.02% -0.33% -0.20% -0.64% 0.69% -0.45%
1968-4 0.14% 0.20% 0.00% 0.46% 0.78% 1.58%
1972-4 -1.07% 0.68% 0.64% -0.13% 1.10% 1.23%
1976-4 -0.90% -0.82% 1.30% -1.21% -0.03% -1.66%
1980-4 1.34% -0.01% 1.27% -1.11% -0.53% 0.96%
1984-4 0.97% -0.60% -0.39% 2.41% -0.08% 2.31%
Avg 0.10% -0.11% 0.71% 0.09% 0.25% 0.89%
1988-4 0.33% 1.07% -0.86% 2.13% 0.28% 2.95%
1992-4 1.19% 0.46% 0.02% 0.06% 0.52% 2.24%
1996-4 0.41% -0.14% 0.26% 0.37% 0.54% 1.44%
2000-4 0.03% -1.79% -0.58% 3.47% 0.59% 1.72%
2004-4 0.20% -0.23% -0.73% -0.93% 0.45% -1.24%
Avg 0.43% -0.13% -0.38% 1.02% 0.47% 1.42%
SPX summary for Presidential Year 4 1956 - 2004
Avg 0.15% -0.19% -0.02% 0.33% 0.24% 0.51%
Win% 69% 31% 42% 54% 62% 62%
SPX summary for all years 1953 - 2007
Avg 0.27% -0.04% -0.17% 0.19% -0.20% 0.05%
Win% 63% 36% 46% 58% 48% 56%

In case you missed it or forgot, I am including the chart showing the mean daily performance during the 4th year of the Presidential Cycle of the SPX for the month of October since 1928. On average the SPX has had a pretty rough go through the 1st 7 trading days before rallying through the end of the month. Last Friday was the 8th trading day of the month.

Money supply (M2)

The chart below was provided by Gordon Harms. More good news. M2 has increased more sharply than at any time I can recall, if there was anything normal about these times that would spark a significant rally in stocks.

Conclusion

Many indicators are at historic extremes, the Fed and Treasury are getting creative and seasonally the low for the month and quarter is usually right about now.

I expect the major indices to be higher on Friday October 17 than they were on Friday October 10.

Last weeks positive forecast was a miss.

By Mike Burk
To subscribe to this report : http://alphaim.net/signup.html

Gordon Harms produces a Power Point for our local timing group. You can get a copy of that at: http://www.stockmarket-ta.com/ .

Disclaimer: Mike Burk is an employee and principal of Alpha Investment Management (Alpha) a registered investment advisor. Charts and figures presented herein are believed to be reliable but we cannot attest to their accuracy. Recent (last 10-15 yrs.) data has been supplied by CSI (csidata.com), FastTrack (fasttrack.net), Quotes Plus (qp2.com) and the Wall Street Journal (wsj.com). Historical data is from Barron's and ISI price books. The views expressed are provided for information purposes only and should not be construed in any way as investment advice. Furthermore, the opinions expressed may change without notice.

Mike Burk Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules