Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Amazon AMZN Stock PRIMEDAY SALE! Trend Analysis - 20th Apr 21
Stock Market Sentiment Speaks: You May Not Believe My 2021 Targets - 20th Apr 21
Stock Market Phase Two Projection - 20th Apr 21
Are Precious Metals & Miners Starting A New Longer-Term Bullish Trend? - 20th Apr 21
Inflation: First the Gain, Then the Pain… - 20th Apr 21
8 Stock Market Indicators in 1: Here's the Message of the Panic/Euphoria Model - 19th Apr 21
Gold - You Can Win a Battle, but Still Lose the War - 19th Apr 21
Will Interest Rates Rally Further Push Gold Price Down? - 19th Apr 21
Gold Fireworks Doubt the Official Inflation Story - 19th Apr 21
YuanPay Team Discuss The Process Of Crypto Diversification - 19th Apr 21
Central Banks May Ramp Up Gold Buying - 18th Apr 21
How to Get Rid of Driveway Weeds With Just WATER! 6 Months later NO Weeds, Ultimate Killer! - 18th Apr 21
State of the European Markets - DAX, FTSE, CAC, AEX, SMI, IBEX 35, S&P/MIB, Euro Stoxx 50, RTS - 18th Apr 21
Einvestment Fund: What You Need To Know About Investments - 18th Apr 21
Google Alphabet (GOOG) AI Deep Mind Stock Trend Analysis - 17th Apr 21
Stocks and Bonds Inflationary Slingshot - 17th Apr 21
Best Smartphone Selfie Stick Tripod Review by ATUMTEK Works with Samsung Galaxy and Iphone - 17th Apr 21
How to Give Budgie's First Bath | Easy Budgie Bathing and Water Training with Lettuce - 17th Apr 21
Record-breaking Decrease in New Passenger Vehicle Sale in Europe - 17th Apr 21
US Stocks Climb A “Wall Of Worry” To New Highs - 16th Apr 21
Gold’s Singular Role - 16th Apr 21
See what Anatomy of a Bursting Market Bubble looks like - 16th Apr 21
Many Stock Market Sectors Are Primed For Another Breakout Rally – Are You? - 16th Apr 21
What Skyrocketing US Home Prices Say About Inflation - 16th Apr 21
Still a Bullish Fever in Stocks? - 16th Apr 21
Trying to Buy Coinbase Stock on IPO Day - Institutional Investors Freeze out Retail Investors - 15th Apr 21
Stocks or Gold – Which Is in the Catbird Seat? - 15th Apr 21
Time For A Stock Market Melt-Up - 15th Apr 21
Stocks Bull Market Progression Now Shows Base Metal Strength - 15th Apr 21
AI Tech Stocks Buy Ratings, Levels and Valuations - 14th Apr 21
Easy 10% to 15% Overclock for 5600x, 5900x, 5950x Using AMD Ryzen Master Precision Boost Overdrive - 14th Apr 21
The Current Cannabis Sector Rally Is Pointing To Another Breakout - 14th Apr 21
U.S. Dollar Junk Bond Market The Easiest Money in History - 14th Apr 21
The SPY Is Nearing Resistance @ $410… What Is Next? - 14th Apr 21
The Curious Stock Market Staircase Rally - 14th Apr 21
Stocks are Heating Up - 14th Apr 21
Two Methods in Calculating For R&D Tax Credits - 14th Apr 21
Stock Market Minor Correction Due - 13th Apr 21
How to Feed Budgies Cucumbers - Best Vegetables Feeding for the First Time, Parakeet Care UK - 13th Apr 21
Biggest Inflation Threat in 40 Years Looms over Markets - 13th Apr 21
How to Get Rich with the Pareto Distribution - Tesco Example - 13th Apr 21
Litecoin and Bitcoin-Which Is Better? - 13th Apr 21
The Major Advantages Of Getting Your PhD Online - 12th Apr 21
Covid-19 Pandemic Current State for UK, US, Europe, Brazil Vaccinations vs Lockdown's Third Wave - 12th Apr 21
Why These Stock Market Indicators Should Grab Your Full Attention - 12th Apr 21
Rising Debt Means a Weaker US Dollar - 12th Apr 21
Another Gold Stocks Upleg - 12th Apr 21
AMD The ZEN Tech Stock - 12th Apr 21
Overclockers UK Build Quality - Why Glue Fan to CPU Heat sink Instead of Using Supplied Clips? - 12th Apr 21 -
What are the Key Capabilities You Should Look for in Fleet Management Software? - 12th Apr 21
What Is Bitcoin Gold? - 12th Apr 21
UK Covd-19 FREE Lateral Flow Self Testing Kits How Use for the First Time at Home - 10th Apr 21
NVIDIA Stock ARMED and Dangeorus! - 10th Apr 21
The History of Bitcoin Hard Forks - 10th Apr 21
Gold Mining Stocks: A House Built on Shaky Ground - 9th Apr 21
Stock Market On the Verge of a Pullback - 9th Apr 21
What Is Bitcoin Unlimited? - 9th Apr 21
Most Money Managers Gamble With Your Money - 9th Apr 21
Top 5 Evolving Trends For Mobile Casinos - 9th Apr 21
Top 5 AI Tech Stocks Investing 2021 Analysis - 8th Apr 21
Dow Stock Market Trend Forecast 2021 - Crash or Continuing Bull Run? - 8th Apr 21
Don’t Be Fooled by the Stock Market Rally - 8th Apr 21
Gold and Latin: Twin Pillars of Western Rejuvenation - 8th Apr 21
Stronger US Dollar Reacts To Global Market Concerns – Which ETFs Will Benefit? Part II - 8th Apr 21
You're invited: Spot the Next BIG Move in Oil, Gas, Energy ETFs - 8th Apr 21
Ladies and Gentlemen, Mr US Dollar is Back - 8th Apr 21
Stock Market New S&P 500 Highs or Metals Rising? - 8th Apr 21
Microsoft AI Azure Cloud Computing Driving Tech Giant Profits - 7th Apr 21
Amazon Tech Stock PRIMEDAY SALE- 7th Apr 21
The US has Metals Problem - Lithium, Graphite, Copper, Nickel Supplies - 7th Apr 21
Yes, the Fed Will Cover Biden’s $4 Trillion Deficit - 7th Apr 21
S&P 500 Fireworks and Gold Going Stronger - 7th Apr 21
Stock Market Perceived Vs. Actual Risks: The Key To Success - 7th Apr 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

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