Monday, October 13, 2014

Stock Market Crash Alert

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Stocks dropped sharply into the close today with the DJIA falling 223 points:

Since the DJIA's reversal from the psychologically important 17000 mark in the wake of the (blood moon) lunar eclipse last Tuesday, the stock market has come down more than four percent.  This may be the opening salvo of selling in the greatest "panic" in human history.

As highlighted in this blog many times over the years, there is a tendency for mass mood to collapse in the autumn.  In fact, thirteen of the twenty worst single-day percentage drops in the DJIA occurred between late-September and early-November, i.e., 65% of the twenty largest daily drops in the stock market occurred in a time interval that constitutes less than 14% of the annual calendar:

Dow Jones Industrial Average: Worst Single-Day Declines

(Dow Jones Industrial Average, percentage change)
Date                           Decline
October 19, 1987                  -22.61%
October 28, 1929                  -12.82%
October 29, 1929                  -11.73%
November 6, 1929                   -9.92%
December 18, 1899                  -8.72%
August 12, 1932                    -8.40%
March 14, 1907                     -8.29%
October 26, 1987                   -8.04%
October 15, 2008                   -7.87%
July 21, 1933                      -7.84%
October 18, 1937                   -7.75%
December 1, 2008                   -7.70%
October 9, 2008                    -7.33%
February 1, 1917                   -7.24%
October 27, 1997                   -7.16%
October 5, 1932                    -7.15%
September 17, 2001                 -7.13%
September 24, 1931                 -7.07%
July 20, 1933                      -7.07%
September 29, 2008                 -6.98%

More specifically, the tendency is for financial panics and waves of mass fear to develop after the full moon in the Hebrew month of Tishrei (this year this meant a lunar eclipse -it marks the beginning of the Jewish harvest festival of Sukkot between Tishrei 15-22) and climax toward the end of the month and new moon.  This autumnal part of the lunar cycle, which usually occurs in October on the Gregorian Calendar, has witnessed the following panics:

13 October 1857 = Panic of 1857 = 25th of Tishrei, 5618

26 October 1962 = Cuban Missile Crisis = 28th of Tishrei, 5723

24 October 2008 = 2008 Financial Crisis (max VIX) = 25th of Tishrei, 5769
[Note that I've included in the list above the October 1962 Cuban Missile Crisis and October 1973 Arab/Israeli Yom Kippur War since, while not reflected in major stock market crashes, these historical crises were still effectively mass panics. This was signified on both occasions by the fact that the highest DEFCON nuclear alerts ever were reached during these crises, actually peaking right into the same time frame of the 7th lunar month as when the stock market crashes in 1929 and 1987 climaxed.]
Could the historical pattern be repeating this October of 2014?

Of course, all of this must be poppycock because the geniuses in economics and finance departments at colleges around the world are still teaching that markets are efficient, there are no predictable patterns (like the Elliott Wave Principle is based upon) and the stock market follows a "Random Walk".  Thus, it's perfectly OK for people to think and behave as selfish, hedonistic animals like "homo economicus" because, in the long-run, competitive market societies like America will gravitate toward "general equilibrium" (READ: "social harmony") and Pareto optimality (READ: maximum happiness for all).  So go ahead and place your faith in Mammon (the "god" of "in god we trust" on American currency should be small-cap) and worship the bronze Charging Bull on Wall Street (our version of the Golden Calf), because great minds have put together an incredibly sophisticated. mathematically consistent theoretical system called the neoclassical synTHESIS that just about proves greed is good and laissez-faire capitalism is the way to manage this world!

Well....I have an opposing THESIS.

For a decade I was schooled in this utter tripe and now it's my turn to school the Ayn Rand-loving herd that pontificates this FALSE RELIGION to the masses to reinforce the current manic peak of collective bipolar insanity we're in the midst of (yes Professor Langlois, I ended that sentence with a preposition!).

We are all part of a social organism and unless we heed the Golden Rule of LOVE that God commands, in the long-run, a world driven by selfishness and greed will gravitate toward general disequilibrium of unprecedented historical scale, what one might call an Elliott Wave Grand Supercycle peak, soon after which the system-as-whole will collapse upon itself or, more specifically, CRASH....most probably in October when the mood of our insane species typically breaks down.

Of course, who am I to tell you all about how the real world works?  I'm up against the greatest minds in the world - esteemed professors, eminent scholars,  the Who's Who scientific establishment ruling modern times - while I'm just some manic-depressive nutcase who's so crazy he thinks he might be Jesus Christ returned!  I'm supposed to better know REALITY?! LOL!!!

Well....I do, because I bothered to actually take a look at it.

Let's all be thankful the reversal in the stock market from Dow 17000 thus far has been constrained to typical Wall Street insanity.  As it is, the projection per the historical pattern is for a panic climax into early next week (Tishrei 25-28 is October 19-22 this year).  I deeply hope and pray that, should this unfold, it's simply a '29-style financial panic and the inevitable onset of the next economic recession (well, it's rather obvious we'd be heading into the second Great Depression this time around).  If the panic starts to take the form of a geopolitical crisis, i.e., WAR, then it could very well be that DEFCON 1 will be reached next week.  In that case, all bets are off, and everyone might as well accept Jesus into their hearts, beg for God's mercy and head for the hills as quickly as possible...


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