Tag Archives: stock market crash

October Surprises in the Stock Market

October surprises in the stock market usually mean bad news for the bulls.

At least that’s the popular notion about the month.

After all, October has a solid reputation for being associated with stock market disasters.

History In The Making

There was the October surprise of the historic stock market crash in 1929, of course.

And the back-to-back October massacres of 1978 and 1979, as well as the major crash in 1987.

They all took place in different Octobers, just like the market plunge on Friday the 13th in 1989, the staggering 554-point drop on October 24, 1997, and the acceleration of the last big market crash in 2008.

October Surprises That Aren’t Bad News

But not all Octobers wind up bringing bad news for the stock market.

In fact, some Octobers during the past 60 years have been extremely positive, at least as far as triggering positive trend reversals have been concerned. There have been a dozen times when stock prices were in a bearish sell-off, and the downtrend came to an end during the month of October.

A Trading High and a Solar Eclipse

The first example comes from 1946.

In that year, the Dow Industrial Average hit a trading high on May 29, which was the eve of a powerful solar eclipse. The decline that followed that eclipse pulled stock prices lower by more than 24% over the coming months, until the market found a bottom on October 10.

Three Months with the Bears in Charge

In 1957, Mercury was just entering the sign of Leo at the Full Moon in July when the market top took place. A decline of more than 19% followed, with the sell-off lasting until October 22.

A 14% Market Loss Ends in October

Three years later, a market top at the Full Moon on June 9, 1960 led into a decline of almost 14% before a trend reversal on October 25 defined a trading bottom, with Mercury stationary and about to go retrograde.

Ending the Plunge of 1962

Trading had just gotten underway for the year on January 3, 1962 when Saturn entered Aquarius and the market began a fierce decline. It plunged by more than 26% before a reversal at the Venus retrograde station on October 23 defined a double bottom in the market trend.

Trying in Vain to Break 1000

In January, 1966 the Dow Jones Industrial Average managed to trade above the magic 1000 mark on an intra-day basis for two consecutive days, but failed to close at that level both times. Then on February 9 and 10, the Dow again traded above 1000, but also failed to maintain that price level at the close. Instead, the stock market went into an extended decline after its failed excursion – the index lost nearly 26% by the time it found a trading bottom on October 7.

October Ends a 21-Month Bear Market

Venus was just entering Capricorn on January 11, 1973 when the Dow topped off a 13-month rally and closed at 1051.70. That high was followed by a fierce bear market, with the index dropping by more than 44% over the next 21 months.

The bloodbath finally came to an end on October 4, 1974, when the Dow hit an intra-day low of 573.22 and prices began to move back upward. That October low was tested successfully in early December, and by January 1975 a clear rebound was underway.

The Harmonic Convergence Market Top

At the stock market’s opening bell on August 24, 1987, the much-publicized “Harmonic Convergence” was underway, with a cluster of the Sun, Mars, Venus, the Moon and Mercury all within an incredibly tight orb of less than four-and-a-half degrees. This alignment was forming a loose Grand Trine pattern with Jupiter and Neptune, creating an extraordinary planetary signature of peak speculation.

Harmonic Convergence Horoscope
The tight planetary configuration in alignment with Jupiter and Neptune brought the Harmonic Convergence trading top in August, 1987. That year the October Surprise was a record-breaking crash followed by a dramatic rebound.

Sure enough, on the following day the Dow surged up to close at the then-incredible level of 2722.42. But the celebration didn’t last long. The stock market began to lose ground, and in spite of trying to define a trading bottom in September, soon broke through support in early October. The culmination came on Monday, October 19, when the Dow gapped down at the open, went into free-fall, and lost 508 points by the closing bell.

This two-month bear market brought the Dow down by more than 36%, but once again October helped define the bottom and end the sell-off (even though it had also brought the historic crash). On October 20 the Dow closed up by more than 100 points, and a slow but steady recovery got underway.

Market Resistance at 3000

There was a Jupiter/Saturn opposition in play on Monday and Tuesday, July 16 and 17, 1990 as the Dow Jones Industrial Average tried  valiantly to close above the 3000-point psychological barrier.

It closed both days at 2999.75.

That failed attempt at the peak of a tug-of-war between the planetary forces of expansion and contraction triggered a sell-off which lasted for just three months, but which brought the index down by almost 22%. A Mars/Jupiter sextile on October 11 added some positive energy to help trigger a trend reversal to the upside.

A Trading Top at a Jupiter Station

The market rallied strongly during the first half of 1998, but when Jupiter went retrograde on July 17 the action topped out with the Dow closing at 9337.97. That prompted a slid of more than 17% before the the market hit a bottom on October 8 and began its recovery.

Uranus, Terrorists and a Moving Average

After a pull-back into the Spring Equinox in 2001, the Dow had rebounded robustly into mid-May. On May 30, however, with a Uranus retrograde station in play, the index dropped below its 25-day moving average, triggering an extended price decline that brought the Dow down more than 16% by early September.

Then, with the September 11 destruction of the World Trade Center, the markets plunged even further, bringing the net loss to almost 29% since the high in May. It took some time for confidence to resume, but by October 10 the Dow was trading above its 25-day moving average once again, paving the way for an advance that was to last through the end of the year.

Another Top at the Spring Equinox

In 2002 the Dow Jones Industrial Average once again hit a high at the Spring Equinox, but trended lower after that. As I noted at the time in the FinancialCyclesWeekly newsletter, “The market rally that had been in play for the past month came to a screeching halt last week, with the Dow Industrials and the S&P 500 virtually unchanged for the week as they barely managed to stay in positive territory and with the NASDAQ dropping by more than 3% for the week.”

The Doiw had dropped by nearly 33% when that year’s October Surprise kicked in to bring an end to the bear market on October 10, as Venus and Saturn made back-to-back retrograde stations.

A Mars/Jupiter Square in October

In 2011 an intense rally during the opening months of the year took the Dow to a new high of 12876.00 on May 2, on the eve of the New Moon. Five months later, the Dow was down more than 19% to hit a low of 10404.49 at the Hades station and Mars/Jupiter square on October 4. By early February, 2012, the Dow was trading well above the high it had set the previous May.

October Surprises – Good and Bad

The bottom line here is that October has often been a pivotal month. The October surprises come from the big market shifts that can occur, but those shifts can be either bullish or bearish.

As astro-traders, we can look for big opportunities in October. As we’ve often seen in studying the markets, big trend changes can sometimes accompany major planetary alignments. When those alignments take place in October, we need to pay very close attention!

 

 

The AIG Trial – The 2008 Crash 6 Years Later

It’s been six years now since the bottom fell out of the stock market.

That was a tumultuous time, with the global financial system on the brink of total collapse.

And at the heart of the crisis was American International Group (AIG), the huge insurance company that had put itself on the line with credit default swaps on collateralized debt obligations (CDOs) to insure $441 billion worth of subprime mortgages. As the housing bubble began to deflate in 2007 and 2008, AIG had to pay out on more and more claims, until the big banks that had created the fraudulent CDOs backed with Liars’ Loans put themselves in jeopardy, ultimately pushing AIG into a massive liquidity crisis and virtual bankruptcy.

On September 16, 2008, with stock prices in a nosedive and the U.S. financial leadership in full panic mode, Ben Shalom Bernanke, at the head of the Federal Reserve Board, in collusion with U.S. Treasury Secretary Hank Paulson and New York Federal Reserve President Timothy Geithner, pushed through a high-interest federal loan to AIG of $86 billion and demanded the resignation of AIG CEO Robert B. Willumstad, who was replaced by Edward M. Liddy, a board member at Goldman Sachs.

More than five weeks before the collapse of AIG, on August 7, 2008, I had put the spotlight on AIG during an interview with Michael Yorba on his Commodities Classics TV show:


Although I called for “considerable downside” for AIG and the markets in general because of the then-imminent ingress of Pluto into Capricorn, and identified the September 23, 2008 Mercury/Mars conjunction at a Mercury station as a target zone for a trading bottom following a price decline by AIG and the insurance industry as a whole, I was definitely too conservative in my forecast at that time. Instead of finding a bottom at 17.25 as I thought possible, AIG dropped to below $5 a share – but it did find a trading bottom following the September 23 Mercury station.

The details about AIG are especially worth reviewing now, more than six years after that original interview, since AIG and all the big financial players from that time frame are the focus of a major trial set to begin in U.S. Federal Court of Claims on Monday, September 29, 2014. During the AIG trial, many new facts about the mechanics of the government bailout of AIG are likely to come to light. Former Federal Reserve Chairman Ben Shalom Bernanke is expected to testify, as well as former Treasury Secretary Henry Paulson, and Timothy Geithner (president of the New York Fed in 2008, and later Treasury Secretary).

Bernanke’s testimony in the AIG trial is certainly likely to attract lots of media attention. During a 2009 interview with 60 Minutes, he said that the AIG collapse made him so angry at the time that he “slammed down the phone more than a few times.”

During that interview, Bernanke said that “It’s absolutely unfair that taxpayer dollars are going to prop up a company that made these terrible bets, that was operating out of the sight of regulators, but which we have no choice but to stabilize, or else risk enormous impact, not just in the financial system, but on the whole U.S. economy.”

In spite of Bernanke’s claims, however, the argument in the AIG trial is that the Federal Reserve and the U.S. Treasury used the ailing AIG “as a vehicle to covertly funnel billions of dollars” to Goldman Sachs and other financial institutions favored by the government in a nefarious backdoor deal.

The complaint in the case for the AIG trial notes that “This is the only time in history when the government has taken without just compensation and/or illegally exacted the assets and equity of a company and its shareholders in connection with a loan, let alone a fully-secured loan bearing an extortionate interest rate.”

A Cosmic Turnaround and a Pause in the Plunge

Today is the Summer Solstice, the longest day of the year in terms of daylight hours and the first day of summer in the northern hemisphere.

The literal meaning of the word “solstice” is “the Sun (Sol) standing still”. That’s what seems to be happening from our point of view on Earth, anyway – for the past six months the Sun’s apparent path through the sky has gradually moved a little bit higher, a little more northward, each day.

Today, however, the Sun’s path through the sky is the same as it was yesterday; the Sun is “standing still.” Tomorrow’s path will be just a tiny bit lower, a little more toward the south, than today’s trajectory. It will continue to move a little lower each day until the Winter Solstice in December, when the cycle begins again.

The solstices are major turning points in the year, and they are often accompanied by shifts in mass psychology and sometimes changes in market trends as well. That’s why W. D. Gann paid such close attention to them, identifying them as key points in the annual cycle that all traders should remember.

This time around, of course, the market top came two days prior to the solstice, with Wednesday’s Sun/Jupiter conjunction calling the shots. And it was against that background of a major market sell-off that we saw the trading action respond to the Summer Solstice today.

As the Sun was standing still, the markets did the same.

The dizzying plunge in stock prices of the past two days paused briefly. Intraday attempts at a rally never really got off the ground, but the push to the downside didn’t pick up much momentum, either. The major indices closed up for the day, but their gains were miniscule compared to the losses of the last two trading sessions.

In other words, stocks basically spent the day treading water. While the big decline has paused, there are few clear indicators that price support will actually hold at the current levels. We’ll have to wait until next week to see if the bulls or the bears resume control. For right now it’s time to step back from the market action, catch our breath, and just stand still for a moment.

Not a bad thing to do on the Summer Solstice!

This Big Move Up Could Bring a Bigger Move Down

When I spoke with Michael Yorba on his radio show yesterday, we went into some detail about this week’s Sun/Jupiter conjunction and what makes it such an unusual event.

The conjunction will be in exact alignment right in the middle of the trading day tomorrow, June 19th.

It brings an enormously powerful push toward bullishness in the equities markets, which is pretty much what we’ve been seeing during the trading sessions so far this week, leading into this planetary alignment.

But as I said to Michael yesterday, this incredibly strong surge of positive energy creates a potential trap for traders and investors, since it also sets the stage for a major move to the downside, which could get underway with a vengeance before this week is out.

It’s that potential for a market plunge that inspired our recent report on Protecting Yourself in an Irrational Market – if you don’t have a copy yet, you’ll want to download it right away, since it covers unique strategies for dealing with several big market inflection points – not only the one coming up at the end of this week, but the ones coming up in July as well.

You can get the report on Protecting Yourself in an Irrational Market by going to http://bit.ly/protect13.

And you can listen to the complete interview that Michael Yorba did with me on yesterday’s radio show right here:

click here to download or listen on your mobile device

Scary Optimism in the Markets

We’re seeing lots of attention in the news media, with plenty of front-page stories and lead features on broadcasts raving about the the record rally in the stock market.

This good news is bad news.

As any good market contrarian will tell you, the louder the praise gets for the new highs in the market, the more likely it is that a big crash is just around the corner.

So even though we’ve just finished up another winning month in the stock market, it’s time to get serious about the possibility of a plunge.

So what do you do when that happens?

One approach, of course, is just to pull all your money out of the market altogether, doing it right away while the getting’s good. Then you stick it under your mattress and wait for another bull market to come along some day.

The problem with that strategy is that your money isn’t making any money, and you don’t know how long you’ll have to sit on the sidelines. It definitely leaves something to be desired.

That’s why we’ve just finished up a new report, exploring an alternative strategy to dealing with the possibility of a big market decline.

It’s called Protecting Yourself in an Irrational Market. Its pretty concise (you can read the whole thing in about 15 or 20 minutes), but it’s packed with a practical strategy that can actually make you more money when the market heads south.

It’s available right now as an instant download – you’ll find details at http://bit.ly/protect13

The Astrology Behind the Twitter Panic

Today's Trading Action in the S&P
Today’s Trading Action in the S&P

It was a wild day on Wall Street, to say the least!

At 1:07 p.m. EDT stock prices began to plunge as traders reacted to a news headline that had just appeared on the Associated Press Twitter feed, reporting that there had been two explosions at the White House and that President Barack Obama had been injured.

In the ensuing market chaos, U.S. Equities lost about $140 billion in total value, at least for a few minutes.

When it became apparent that the AP tweet was a fake, stock prices quickly rebounded. The S&P 500 finished the trading session up a little more than 1% for the day as a whole.

In keeping with my typical behavior whenever unusual events like this occur, I decided to take a look at what was going astrologically at the time of the Twitter Panic. I thought that perhaps the planets could provide some useful insights.

Neptune Triggering Planetary Midpoint Durng The Twiter Panic
Neptune Triggering Planetary Midpoints Durng The Twiter Panic

As it turned out, there was an astonishing array of planetary pictures that were active when the Twitter rumor swept through the trading floor and prices went into free-fall. Here are some of the major ones, along with brief notes about their significance.

Neptune, the planet associated with illusion and deception, was extremely dominant at the time, activating these planetary midpoints:

  • Sun/Moon – lies, deception, and misunderstandings
  • Mars/Kronos – ineffectiveness in the power of the state
  • Ascendant/Cupido – changing circumstances whose real nature is revealed after the fact
  • Pluto/Zeus – wasted efforts and actions taken in vain
  • Uranus/Apollon – rapid increase in tension because of uncertainty
  • Aries/Saturn – quarantines, suspected illness or injury
  • Saturn/Hades – severe losses and a dismal fate
  • Chiron/Admetos – problematical obstacles
  • Pluto/Apollon – big transformations that are hidden from view
  • Sun/Kronos – confusion in authority; deceit from independent sources
  • Node/Cupido – the liquidation of corporations

Mercury, with all its strong connections to communications and market action, triggered

  • Saturn/Cupido – thoughts about major separations
  • Node/Chiron – information spread through inconvenient connections

Uranus, which is associated with the electronic flow of information and with high-frequency trading, was plugged into the midpoint structures of

  • Sun/Jupiter – a sudden forced change in luck
  • Moon/Zeus – the sudden incitement of extreme emotions
  • Cupido/Vulcanus – an entire community faces a test of strength
  • Midheaven/Chiron – an inconvenient state of tension and excitement

And the fast-moving Moon, the primary planetary driver of emotions in the markets, spent just a couple of minutes triggering the midpoints of

  • Midheaven/Neptune – being swept away by extreme fantasy
  • Chiron/Apollon – lots of people having a problematical emotional experience
  • Aries/Pluto – widespread changes in a large group of people
  • Uranus/Hades – loathing and apprehensions about evil deeds and assassinations

In aggregate, then, the planetary configurations associated with the Twitter Panic paint a pretty clear picture of exactly what was going on. We can count on astrology to give us an in-depth look behind the scenes whenever the markets make sudden moves, which is what gives astro-traders such an extraordinary advantage!