S&P 500 (log scale) – Anniversary Dates
S&P 500 (log scale) – Anniversary Dates Illustration 11.01Illustration 11.01
1 199777 7 1199778 8 1199779 9 1199880 0 1199881 1 1199882 2 1199883 3 1199884 4 1199885 5 1199886 6 1199887 7 1199888 8 1199889 9 1199990 0 1199991 1 11999922 OCT 11 OCT 11 1990 LOW 1990 LOW OCT 10 OCT 10 1989 TOP 1989 TOP OCT 11 OCT 11 1983 TOP 1983 TOP OCT OCT 1987 CRASH 1987 CRASH OCT OCT 1978 CRASH 1978 CRASH 600 – 600 – 150 – 150 – 300 – 300 –
S&P 500
S&P 500 – Anniversary Dates (cont.)– Anniversary Dates (cont.) Illustration 11.02Illustration 11.02
OCT 4 OCT 4 2011 2011 OCT 10 OCT 10 2002 2002 OCT 8 OCT 8 1999 1999 OCT 11 OCT 11 2007 2007 400 – 400 – 600 – 600 – 800 – 800 – 1000 – 1000 – 1200 – 1200 – 1400 – 1400 – 1600 – 1600 – 1800 – 1800 – 2000 – 2000 – 1 1999933 11999944 11999955 11999966 11999977 11999988 11999999 22000000 22000011 22000022 22000033 22000044 22000055 20200066 22000077 22000088 22000099 22001100 22001111 22001122 22001133 OCT 8 OCT 8 1997 1997
The previous charts highlight some of the more The previous charts highlight some of the more significant turning points which have occurred significant turning points which have occurred in the markets in October – particularly in early in the markets in October – particularly in early October, and more particularly around the 8th October, and more particularly around the 8th to the 1
to the 11th of the month. 1th of the month. In the examples weIn the examples we have walked through earlier, you will have have walked through earlier, you will have noticednoticed many other examples of where an October date many other examples of where an October date produced a significant market top or bottom, produced a significant market top or bottom, which haven’t been included in the charts. which haven’t been included in the charts. I think it also helps to pay a visit back to Friday, 11 I think it also helps to pay a visit back to Friday, 11 October 1929 and look at the price movement of October 1929 and look at the price movement of the Dow Jones immediately following that date! the Dow Jones immediately following that date! Over the years, I have learnt that different Over the years, I have learnt that different markets will work to different anniversary dates. markets will work to different anniversary dates. In some instances, an anniversary date may not In some instances, an anniversary date may not necessarily mark the date of a top or a bottom, necessarily mark the date of a top or a bottom, but a significant day that influences market but a significant day that influences market behaviour or which creates volatility. The Dow behaviour or which creates volatility. The Dow Jones in particular seems to like the month of Jones in particular seems to like the month of August as a time to celebrate its anniversaries – August as a time to celebrate its anniversaries – for example the 1921 low on August 24 and the for example the 1921 low on August 24 and the stock market high in 1987 on August 25. stock market high in 1987 on August 25. In 1997,In 1997, the Dow Jones index made its yearly high on the Dow Jones index made its yearly high on August 8, and then exactly ten years later in 2007, August 8, and then exactly ten years later in 2007, a very sharp decline commenced off a significant a very sharp decline commenced off a significant top which occurred on August 8.
top which occurred on August 8.
Some commentators have in fact attributed Some commentators have in fact attributed 8 August 2007 as the date where the active 8 August 2007 as the date where the active phase of the recent global financial crisis can be phase of the recent global financial crisis can be attributed to – this was the date when a major attributed to – this was the date when a major international bank terminated withdrawals from international bank terminated withdrawals from three hedge funds manifesting into a complete three hedge funds manifesting into a complete liquidity crisis and sparking the now famous liquidity crisis and sparking the now famous collapse of Lehman Brothers and market turmoil collapse of Lehman Brothers and market turmoil which soon followed.
which soon followed. Finally, and at Finally, and at the risk ofthe risk of labouring the point, the 8th of August is also labouring the point, the 8th of August is also considered to be a significant time in another considered to be a significant time in another major period involving US equity markets. major period involving US equity markets. On 8 August, 1929, the Federal Reserve On 8 August, 1929, the Federal Reserve announced that it had increased its discount announced that it had increased its discount rate from 5 percent
rate from 5 percent to 6 percent. to 6 percent. This caused aThis caused a swift and immediate market reaction which saw swift and immediate market reaction which saw stock prices dramatically fall.
stock prices dramatically fall. Whilst stock pricesWhilst stock prices eventually traded higher to reach a final high on 3 eventually traded higher to reach a final high on 3 September 1929 (after some market intervention), September 1929 (after some market intervention), it is 8 August 1929 which is commonly referred it is 8 August 1929 which is commonly referred to as the date which first broke the 1920’s bull to as the date which first broke the 1920’s bull market, precipitating the greatest stock market market, precipitating the greatest stock market fall in history.
fall in history.
A key anniversary date to watch in
A key anniversary date to watch in
the silver market
the silver market
I would like to end this chapter on anniversaries I would like to end this chapter on anniversaries by using a very recent example in the precious by using a very recent example in the precious metals silver marke
metals silver market. t. The following The following chart simplychart simply highlights three significant turning points in silver, highlights three significant turning points in silver, all of which occurred exactly on June 28 in 2011, all of which occurred exactly on June 28 in 2011, 2012 and 2013.
$10.00 $10.00 $15.00 $15.00 $20.00 $20.00 $25.00 $25.00 $30.00 $30.00 $35.00 $35.00 $40.00 $40.00 $45.00 $45.00 $50.00 $50.00 J Jaann--110 0 JJuunn--110 0 NNoovv--110 0 AApprr--111 1 SSeepp--111 1 FFeebb--112 2 JJuull--112 2 DDeecc--112 2 MMaayy--113 3 OOcctt--1133 JUNE 28 JUNE 28 2011 2011 JUNE 28 JUNE 28 2012 2012 JUNE 28 JUNE 28 2013 2013
I hope this demonstrates to you the importance
I hope this demonstrates to you the importance
of anniversaries.
of anniversaries. In the next chapterIn the next chapter, I will, I will
continue to show you the importance of
continue to show you the importance of
anniversary dates and how I have incorporated
anniversary dates and how I have incorporated
a simple adaptation of this predictive tool
a simple adaptation of this predictive tool
to forecast turning points on a monthly time
to forecast turning points on a monthly time
frame.
frame. I call this technique, “trading to TI call this technique, “trading to Time.”ime.”
Silver – Anniversary Dates
Silver – Anniversary Dates Illustration 11.03Illustration 11.03
USD / OZ USD / OZ
If the previous chapters haven’t already changed If the previous chapters haven’t already changed the way you look at the markets, then this chapter the way you look at the markets, then this chapter will. I honestly believe that what you are about to will. I honestly believe that what you are about to learn in this chapter can be used as a standalone learn in this chapter can be used as a standalone tool for
tool fortradingtrading the dates of your forecast market the dates of your forecast market tops and bottoms. Before going any further, it is tops and bottoms. Before going any further, it is at
at this stage that I wish tthis stage that I wish to make an io make an importantmportant point, as I underscored the word ‘trading’ for a point, as I underscored the word ‘trading’ for a specific reason.
specific reason.
The Trading Tools I am teaching you in this course The Trading Tools I am teaching you in this course will equip you with what is needed to forecast a will equip you with what is needed to forecast a future turning point in the market a year or more future turning point in the market a year or more in advance – but it is important to remember that in advance – but it is important to remember that you won’t actually be able to buy or sell off that you won’t actually be able to buy or sell off that forecast until the
forecast until the day actually arrives. day actually arrives. When youWhen you eventually do get closer to the event, it is at that eventually do get closer to the event, it is at that point in time where it seems sensible to use your point in time where it seems sensible to use your Trading Tool box to try and pin point the exact Trading Tool box to try and pin point the exact date of the market turn.
date of the market turn.
In an earlier chapter, we walked through how to In an earlier chapter, we walked through how to calculate when a major bull or bear market cycle calculate when a major bull or bear market cycle is likely to begin and end using long term time is likely to begin and end using long term time frames.
frames. In almost all In almost all circumstances, those timecircumstances, those time frames you will be dealing with will be over 500 frames you will be dealing with will be over 500 or even
or even 1000 days. 1000 days. When working with When working with suchsuch large time frames, you need to allow yourself a large time frames, you need to allow yourself a small degree of variance in your analysis – I will small degree of variance in your analysis – I will typically allow for a one percent variation when typically allow for a one percent variation when I am using a
I am using a major time count. major time count. My ‘trading toMy ‘trading to Time’ technique however, allows you to narrow Time’ technique however, allows you to narrow that forecast to within one or two trading days. that forecast to within one or two trading days.
This is why I believe the “trading to Time”
This is why I believe the “trading to Time”
tool is so important.
tool is so important.
The bull market high in the S&P500 on 11 The bull market high in the S&P500 on 11 October 2007 is a good case in
October 2007 is a good case in point. point. In anIn an earlier chapter, I outlined that Bob and I were earlier chapter, I outlined that Bob and I were expecting the 2002 bull market to be a repeat expecting the 2002 bull market to be a repeat of 1982.
of 1982. Had we stuck exactly to Had we stuck exactly to the 1982 bullthe 1982 bull market time frame of 1842 days, it would have market time frame of 1842 days, it would have kept us waiting until 26 October 2007 before kept us waiting until 26 October 2007 before we began looking for a trade signal confirming we began looking for a trade signal confirming that the top was in.
that the top was in. In the end, it was our yearlyIn the end, it was our yearly anniversaries which told us that 10 October was a anniversaries which told us that 10 October was a date to watch (being the yearly anniversary of the date to watch (being the yearly anniversary of the 2002 low) – and this date proved to be only one 2002 low) – and this date proved to be only one day out from the actual top.
day out from the actual top.
As you will soon see, the trading to Time tool As you will soon see, the trading to Time tool uses monthly anniversaries to achieve the uses monthly anniversaries to achieve the same purpose.
same purpose. In 2007, it In 2007, it was the monthlywas the monthly anniversaries that were telling us the 15th day anniversaries that were telling us the 15th day of the month was a crucial time each month of the month was a crucial time each month to watch.
to watch. In October 2007, it was the 15th oIn October 2007, it was the 15th off October (which came in only two trading days October (which came in only two trading days after the yearly top) which just happened to give after the yearly top) which just happened to give the best trading signal to sell, confirming that the the best trading signal to sell, confirming that the top was in.
top was in.
trading to Time
trading to Time
trading to Time is directly related to our previous trading to Time is directly related to our previous chapter about
chapter about anniversary dates. anniversary dates. The keyThe key difference however is that instead of looking at difference however is that instead of looking at the same date appearing each year, we use a the same date appearing each year, we use a major reference point that has produced a recent major reference point that has produced a recent significant high or low in the market, and watch significant high or low in the market, and watch for that same date to produce future market tops for that same date to produce future market tops and bottoms on a monthly basis.
and bottoms on a monthly basis. To illustrate the point, the following chart To illustrate the point, the following chart represents the same price action in Silver that represents the same price action in Silver that was presented in the last chapter
was presented in the last chapter. . Earlier, weEarlier, we highlighted June 28 as the yearly anniversary date highlighted June 28 as the yearly anniversary date to watch in
to watch in the silver market. the silver market. The date “28th”The date “28th” therefore becomes
therefore becomes significant. significant. Applying this onApplying this on a monthly anniversary basis, we would therefore a monthly anniversary basis, we would therefore watch out for significant turning points to occur watch out for significant turning points to occur in the silver market on or around the 28th of each in the silver market on or around the 28th of each month.
month.
trading to Time dates to watch
trading to Time dates to watch
in the silver market
in the silver market
The following chart shows the incredible The following chart shows the incredible frequency with which significant tops and frequency with which significant tops and bottoms have occurred in the silver market on bottoms have occurred in the silver market on either the 28th or the 29th day of the month – either the 28th or the 29th day of the month – a pattern which has continued for three a pattern which has continued for three
consecutive trading years since the start of 2011. consecutive trading years since the start of 2011.