THE CRASH OF 2015

 

David McMinn

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Yet another financial crisis is looming on the horizon, something that may be expected every several years in this era of deregulated markets and corporatocracy. This crash is strongly indicated by the record DJIA high occurring on May 19, 2015 and the 60 year intervals associated with US October panics. Both are reasonably reliable indicators of future financial distress, a topic covered in the ensuing article. At certain times these techniques can be quite revealing. In mid-2011, the author noted that the April 29 high had a lunar phase of 321 A°, which was identical to that recorded for the high for the 2008 calendar year. Another panic in September with large one day falls 6 days apart was expected and the markets did not disappoint. The actual panic in 2011 did occurred with two large one day falls 6 days apart, but in early August – around one month earlier than expected.

From the 60 year intervals associated with October panics, a crash was expected in late 2015 several years ago. How this panic would play out was only recently indicated by the DJIA top forming on May 19, 2015. Presumably this will be similar the the aftermaths of the corresponding peaks in 1901, 1946 and 2001. 

Background. An annual one day (AOD) rise or an AOD fall is taken as the biggest one day percentage rise or fall in the year commencing March 1. They represent the biggest one day shifts in market sentiment during a given year and offer excellent correlates with DJIA trends (McMinn, 2000, 2004, 2010).. Moon Sun data was timed at noon (New York) on the relevant trading day. Degrees on the ecliptic circle have been given as E°, while the angular degrees between the Moon and Sun (lunar phase) were abbreviated to Ao. Thus, 00 Ao denotes a new Moon, 90 Ao a first quarter Moon, 180 Ao a full Moon and 270 Ao a third quarter Moon. The low after the panic was called the post-crash low in this paper. The term season has been taken as a given period during the solar year and did not apply to the traditional seasons – spring, summer, autumn and winter.

DJIA Peaks and Lunar Phase

The peaks at the beginning of DJIA bear markets cannot be correlated with lunar phase or seasonal timing. Even so, excellent links between lunar phase and the DJIA peaks could still be accomplished but only by listing the highs by month – day (year ignored) and then breaking this sample down into small seasonal subsets (DJIA Peaks, Seasonality and Lunar Phase). Those peaks forming around the same time of year usually have similar lunar phase as summarized in Table 1. It has been a persistent trend over the past 125 years. Only the season between September 26 and December 10 did not exhibit this phenomenon.

Table 1
A SUMMARY
LUNAR PHASE AND SEASONAL  DJIA PEAKS
1890-2014

Season

Number
of Highs

Sun
E
o

Moon
E
o

Phase
A
o

Jan 16 – Feb 09

3

295 - 325

195 - 235

235 – 295

Feb 10 – Apr 28

3
3

350 – 040
345 - 000

310 – 325
030 - 065

270 – 335
030 - 080

Apr 29 – Jun 30

4

055 - 090

040 - 105

340 - 015

Jul 1 – Jul 31

2

110 - 120

035 - 040

280 - 290

Aug 01 – Sep 10

3
2

150 – 165
160 - 170

160 – 180
340 -  350

000 – 015
175 - 185

Sep 11 – Sep 25

2

165 - 180

150 - 160

330 – 350

Sep 26 – Dec 10

8

No overall pattern

Dec 11 – Jan 15

3

260 - 295

335 - 030

075 – 095

NB: The Mar 1 – Apr 15 and Aug 1 – Sep 10 seasons each had two lunar phase clusterings.
Source of Raw Data.
 Bespoke Investment Group (2008) for the beginning of all bear markets post 1900. The author expanded this listing to cover the period 1890 to 1899 and included four additional DJIA corrections with declines from -18.5% to -19.9%.


 

The relationships between seasonality, lunar phase and the beginning of DJIA bear markets held up very well since 1890. The findings supported the Moon Sun hypothesis, which viewed financial markets as being structured mathematically in time and moving in tune with lunisolar cycles (McMinn, 2004, 2010, 2013).

The April 29–June 30 Season

At the time of writing, the DJIA record high occurred on May 19, 2015, with lunar phase at 019 Ao. This was within range for other DJIA peaks during the April 29 to June 30 season (see Table 2). If the trend persists, the 2015 high should be followed by another September panic, as occurred after the 1901, 1946 and 2001 highs.

Table 2
DJIA PEAKS APRIL 29 – JUNE 30 SINCE 1890
Lunar Phase range 340 - 020 Ao

DJIA Peak

Lunar Phase A°

May 17, 1890

346

May 19. 2015

019

May 21, 2001

342

May 29, 1946

343

Jun 17, 1901

015


The highs in 1901, 1946 and 2001 showed up in the month to June 20 (see Table 3) and were each followed by two major one day DJIA falls 6 days apart in September. The associated major one day rises took place in the month to October 15.

Table 3
6 DAY INTERVALS AND DJIA PEAKS APRIL 29 TO JUNE 30

DJIA Peak

1st OD Fall

%

2nd OD Fall

%

OD Rise

%

Panics of 1901, 1946 & 2001

Jun 17, 1901

Sep 07, 1901

-4.43

Sep 13, 1901

-4.27

Sep 16, 1901

+4.10

May 29, 1946

Sep 03, 1946

-5.56

Sep 09, 1946

-4.41

Oct 15, 1946

+3.58

May 21, 2001

Sep 11, 2001

na

Sep 17, 2001

-7.13

Sep 21, 2001

+4.47

Panics of 2008 and 2011

May 02, 2008 (a)

Oct 09, 2008

-7.33

Oct 15, 2008

-7.87

Oct 13, 2008

+11.08

Apr 29, 2011

Aug 04, 2011

-4.31

Aug 10, 2011

-4.65

Nov 30, 2011

+4.24

(a) Peak in the calendar year.
Abbreviation: OD – One Day.


The peaks in 1901, 1946 and 2001 happened with lunar phase between 340 and 015 A° (around the new Moon) (see Table 4). The first one day fall in the 1901 and 2001 panics had lunar phase between 280 and 300 A° (after the 3rd quarter Moon) and in 1946 at 91 A° (on the 1st quarter Moon). There was no common lunar phase for the major one day rises after the panics.  

Table 4
LUNAR PHASE AND DJIA PEAKS May 20 TO JUNE 30

DJIA Peak

Phase A°

1st OD Fall

Phase
A°

2nd OD Fall

Phase
A°

Panics of 1901, 1946 & 2001

Jun 17, 1901

015

Sep 07, 1901

298

Sep 13, 1901

010

May 29, 1946

343

Sep 03, 1946

091

Sep 09, 1946

159

May 21, 2001

342

Sep 11, 2001

281

Sep 17, 2001

004

Panics of 2008 & 2011

May 02, 2008*

321

Oct 09, 2008

115

Oct 15, 2008

192

Apr 29, 2011**

321

Aug 04, 2011

067

Aug 10, 2011

143

* Market high for the calendar year.
** Beginning of a
-15.9% correction .
Abbreviation: OD – One Day.


The May 17, 1890 peak had lunar phase at 346 A° and was within range for other May - June highs. However, it was anomalous as the ensuing panic happened in early December with large one day falls 5 days apart (see Table 5).

Table 5
THE DECEMBER 1890 PANIC

OD Fall

 

AOD Fall

 

AOD Rise

Dec 01, 1890
-3.29%

+5 days

Dec 06, 1890
-3.65%

+3 days

Dec 09, 1890
+3,15%

Abbreviations: OD – One Day. AOD – Annual One Day.

For 2008 and 2011, the tops occurred on May 2 and April 30 respectively, a little earlier in the year than in 1901, 1946 and 2001. On the day of these two peaks, lunar phase was at 321 A°, followed by two major one day falls 6 days apart in early August and mid-October. Importantly, the AOD rise in 2008 occurred four days after the first one day fall, whereas the AOD fall showed the same timing in 2011 (see Table 6).

Table 6
THE 2008 AND 2011 DJIA PANICS

Panic of 2008

OD Fall

 

AOD Rise

 

AOD Fall

Oct 09, 2008
-7.33%

+4 days

Oct 13, 2008
+11.54%

+2 days

Oct 15, 2008

-7.87%

Panic of 2011 (a)

OD Fall

 

AOD Fall

 

OD Fall

Aug 04, 2011
-4.31%

+4 days

Aug 08, 2011
-5.55%

+2 days

Aug 10, 2011
-4.62%

Abbreviations: OD – One Day. AOD – Annual One Day.
(a) Correction market of -15.9%.

 
60 Year Intervals and October Panics

60 year intervals for October panics are among the most consistent trends in financial history. According to McMinn (2010b), “Since 1885, some 10 major DJIA AOD falls (≥ -3.60%) occurred between September 10 and October 31. Adding or subtracting 60 years to each of these dates gave a corresponding AOD fall (≥ -2.45%) between August 19 and December 20, WITH NO EXCEPTIONS.” Examples of the 60 year intervals in US history have been presented in Appendix 1. Crucially, 2015 occurred in the 60 year series commencing in 1895 (Dec 18, 12 Stock Average -6.61%), 1955 (Sep 26, DJIA -6.51%), 2015 (????).

Over recent centuries there have only been two exceptions to the 60 year effect as shown in Table 7. The US banking panic of October 22, 1907 did not produce a crisis in 1967, while the US Black Friday of September 19, 1873 gave a DJIA AOD fall in July 21, 1933 (-7.84%), about a month earlier than could have been expected.

Table 7
ANOMALIES TO THE 60 YEAR EFFECT

Event

 

Event

 

Event

Oct 23, 1847
British banking panic

+ 60

Oct 22, 1907
US banking panic

+ 60

1967
No panic

1813
Unknown

+ 60

Sep 19, 1873
US Black Friday

+ 60

Jul 21, 1933
DJIA AOD fall


The Crash of 2015

Indications are for another financial panic late in the year, probably in September. The big question is – How will the panic unfold? Would it be a temporary panic and correction as in 1955 or something a far more serious as in the 1895-1896 bear market. The more likely option will be a protracted bear market, as suggested from the record high on May 19, 2015 and its similarities to the peaks on 1901, 1946 and 2001. The actual trigger event for this crisis cannot be predicted, but there are various possibilities – a Greek contagion, a serious security threat, a Tokyo mega quake or whatever. As always only time will tell.

The Moon Sun relationships in finance are very interesting, but they cannot explain how these luminaries could possibly influence the timing of DJIA peaks and financial panics. Obviously, the changing angles between the Moon, the Sun and the spring equinox point (000 E°) were vitally important in solving the mystery. Nothing more can be stated. Even so, there may be emerging a simple theory based on Moon Sun tidal harmonics. The complexity of financial cycles would be reduced to a few basic principles. Such a paradigm shift would offer the potential to make accurate forecasts of critical phenomena years in advance. Regrettably, this is unlikely to be achieved anytime soon.


References

Bespoke Investment Group. 2008, Historical Bull and Bear Markets for the Dow: 1900-Present. October 14. Available at: http://www.bespokeinvest.com/thinkbig/2008/10/14/historical-bull-and-bear-.        markets-for-the-dow-1900-present.html
McMinn, D. 1986. The 56 Year Cycles & Financial Crises. 15th Conference of Economists. The Economic Society of Australia. August 25-29. 22p.
McMinn, D, 1993. US Financial Crises & The Number 56.
The Australian Technical Analyst Association Newsletter. p 21-25. September.
McMinn, D. 1994. Mob Psychology & The Number 56. The Australian Technical Analyst Association Newsletter. p 28-37. March.
McMinn, D. 1995. Financial Crises & The Number 56. Market Technician. The Society of Technical Analysts. Issue No 24, p 9-14. December.
McMinn, D. 2000. Lunar Phase & US Crises. The Australian Technical Analysts Association Journal. p 20-31. January/February.
McMinn, D. 2004. Market Timing By The Moon & The Sun. Twin Palms Publishing. 153p.
McMinn, D. 2010a. Market Timing Moon Sun Research 2006-2009. Privately published.183p.
McMinn, D. 2010b. 60 year intervals and October panics. Market Technician.Journal of the Society of Technical Analysts. Issue 67. p 13–15. June.
McMinn, D. 2013a, Historic DJIA Peaks, Any Relevance To Seismic Activity? New Concepts In Global Tectonics Journal. Vol 1, No 2. p 15-22. June.
McMinn, D. 2013b. Fibonacci – Lucas Numbers, Moon-Sun Cycles and Financial Timing. Market Technician. Journal of the Society of Technical Analysts. Issue 75. p 9-13. October.
McMinn, D. 2015. DJIA Peaks, Seasonality and Lunar Phase. New Concepts in Global Tectonics Journal. To be published. September.


 

Appendix 1
EXAMPLES OF 60 YEAR INTERVALS & US OCTOBER PANICS

Date

DJIA % AOD Fall

Event

Oct 09, 1839

na

US banking panic

Dec 18, 1899

-8.72

DJIA AOD fall. Boer War disrupts gold supplies.

 

 

 

Sep 24, 1869

na

US Black Friday. Gold panic.

Oct 28, 1929

-12.83

US Black Monday.

Oct 13, 1989

-6.91

Friday 13 panic.

 

 

 

Oct 9, 1871

na

Chicago Fire panic.

Sep 24, 1931

-7.07

UK suspends gold standard.

Nov 15, 1991

-3.91

DJIA AOD fall.

 

 

 

Dec 18, 1895

-6.61 (a)

Monroe Doctrine scare.

Sep 26, 1955

-6.54

President’s heart attack.

2015

????

Panic late in the year?

 

 

 

Oct 18, 1937

-7.75

DJIA AOD fall.

Oct 27, 1997

-7.65

Blue Monday.

 

 

 

Oct 9, 1927

-3.65

DJIA AOD fall.

Oct 19, 1987

-22.61

Black Monday.

 

 

 

Nov 3, 1948

-3.65

Upset Truman presidential win.

Oct 15, 2008

-7.75

Black October. After Lehman Bros failure.

(a) Based on the 12 Stock Average index.
NB: The AOD fall was the biggest percentage one day fall in the DJIA during the year beginning March 1.