Tuesday, October 11, 2011

Autumn Panic Update: Final Days Or Temporary Reprieve?

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The high-risk window for an autumn mass panic that I've been warning about since August just opened with tonight's full moon:

Here's a note I sent to Robert Prechter earlier today:

Full moon is tonight. Again, between the full moon and new moon in the 7th lunar month has seen some of the largest panics in history. Market internals and the wave count suggest Oct. 4th was a major low and a multi-week rally is underway, but seasonality is still what I'm watching since this is a predominant force in mass mood swings IMHO.

As for the Elliott Wave count, a distinct five-wave pattern does appear to have developed between the early-May top and the October 4th low:

This wave count is already generally consistent with seasonality given a potentially important October low, but one still needs to remain alert as it is typically this late-October period after the full moon and into the new moon when historic panics occur.

Again, any such panic can take the form of a financial crisis and/or it can take the form of war. In this regard, I reviewed the two key historical examples today that I've been highlighting, i.e., the October 1962 Cuban Missile Crisis and the 1973 Yom Kippur Arab/Israeli War.

With regard to the October full and new moons in 1962 and 1973, we find the following:

1962 Cuban Missile Crisis: Oct. 13th full moon / Oct. 28th new moon

October 14, 1962 - A U-2 flying over western Cuba discovers missile sites. Photographs obtained by this flight provide hard evidence that Soviets have missiles in Cuba.

October 24, 1962 - Soviet ships en route to Cuba with questionable cargo either slow down or reverse their course except for one. Military forces go to DEFCON 2 the highest ever in U.S. history.

1973 Yom Kippur Arab/Israeli War - Oct. 11th full moon / Oct. 26th new moon

October 11th, 1973 - Israel attacks Syria from its positions on the Golan Heights. The Soviet Union's ambassador to the United States, Anatoly Dobrynin, tells U.S. Secretary of State Henry Kissinger that Soviet airborne forces are on the alert to defend Damascus. Kissinger warns Dobrynin that if the Soviets send troops to the Middle East, the United States would as well.

October 24th, 1973 - A second cease-fire is put into effect, but fighting continues between Egypt and Israel. As a result, the Soviet Union threatens the United States that it will send troops to support the Egyptians. The United States puts its nuclear forces on a higher alert. The Soviet Union withdraws its threat the following day.

2011? Oct. 11th full moon / Oct. 26th new moon

While no international crisis of import has thus far erupted, one should note how today Iran was accused by the U.S. of plotting to assassinate Saudi Arabia's ambassador in Washington, D.C.:

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Is this leading up to some sort of international crisis?

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