Jim Ross on the 1929/1987 Analogy and the December 10 Turn Window

Jim Ross (aka VirginiaJim) has been presenting the intriguing analogy to the 1929/1987 setup as part of a series on historical analogies. (So far 1938 is still looking the closest.) To summarize, the setup to both the '29 and the '87 crash were almost precisely on the same dates based on the lunar calendar; and we have been peaking and bottoming on the same lunar schedule this year, until very recently. 

Now, he believes as I do that crashes are rare, and extrapolating from 2 data points is quite a stretch. He wants to conclude his analysis since he thinks the 1929/1987 analogy was close, but has failed. Nonetheless, it still points to Dec 10 as a significant turn date, and he wants to add a bit more to emphasize the potential importance of that turn window.

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Dates, dates, dates.  If nothing else, Fibonacci permutations point to December 10 to 14 for SOMETHING. 

A couple very respectable Fib and Spiral Calendar guys (Roy and Kevin) tie the 2000 SPX top  and the 2003 SPX bottom to December 12, 2009 (a Saturday, so make that the 11^th or 14^th).  

Simply, 1000 days from 1/24/2000 DJIA top to 10/10/2002 DJIA bottom and 2618 days from 10/10/2002 bottom to 12/12/2009 (a Saturday) projection provides some nice Fib relationships.  But it’s far more in depth than that and has to do with forming a perfect time triangle. It is well worth studying. Here’s the very interesting math and geometry.

As you may recall I have December 10, 2009 as being the Spiral Calendar resonance of the 1929 and 1987 crash as opposed to the above that suggests a new and final recovery high. The 1929-1987 Spiral Calendar Analog would give the high before the crash as already being printed. Of the four SC Analog dates:

• July 11, 2009 is a perfect prediction
• October 16, 2009 final high was an interim high, but not the final high - a failure
• November 23, 2009 printed a high which, as I write this, has been exceeded intraday but not on a closing basis.  
• December 10, 2009 final high??

To the extent you continue to follow the 4 dates of the SC Analog you are left with December 10, 2009 (only 1 trading day off from Roy and Kevin’s Saturday December 12) as the final date forthcoming.   Here’s my SC computations you’ve seen before:

And here’s the implied 1929/1987/2009 fractal comparison as of last Friday:

Now to add a little “Prectarian” flavor. Robert Prechter sent out an interim alert on November 23, 2009 that the rally from March 9, 2009 to that day was 50% of the time of the decline from October 11, 2007 to March 9, 2009. Further, price intersected the vector formed by the Oct 2007 high and May 19, 2008 on November 23, 2009. Lots of stuff to say the rally ended on 11/23/08.  Again, as I write this, the 11/23 high has been exceeded on an intraday basis. Prechter contrarians would say that’s all the MORE reason we’ll see a new high Dec 10.  

So, December 10-14 certainly seems to be shaping up for something noteworthy. The December 12, 2009 final high contingent projects a blowoff to 1198 before a multi-year decline and today is really looking like it. The SC Analog (which has failed one of 3 dates to this point) would predict it December 10, 2009 as being the resonance of two grand declines and harbinger of many years of lower markets. 

Pick you poison.  I don’t know which way to go (fortunately, I feel much better about my gender).  

As Schultz would say “I see nothing, nothing.”  

Comments

[cloudslicer]

Its amazing what people can come up with if they have too much time on their hands.

[joe]

Firstly - I agree with Cloudslicer.

Secondly - I don't think today or the last few weeks looks like anything more than a tight horizontal range that the markets keeps bouncing between.

Thirdly - the counts are not working here.

BUT -

The market is incredibly over bought. Doesn't mean it can't get more over bought. That horizontal channel is going to break, probably pretty soon - up or down.

I am betting on down - because the whole thing does look and feel very very toppy.

Joe

[yelnick]

Joe, yes the market looks like a triangle or complex flat correction. Might it be topping? I suppose we would need to either find a small wave 5 or count this as a wave 2 flat. I had thought before last week that last week would fool, since it is a stub holiday week. That is why I kept commenting, don't extrapolate from last week. This week in other words should tell use where the market is going.

[joe]

I think its this week too - for some kind of signal. We are on the same page Yelnik.

I am telling you though - the options action last week and into this week does indicate a drop comming (I believe). And you are also right - there should be a small wave 5 count out there - somewhere, but I do not see it.

The only thing that kind of works as a short term trade is trying to put the top of the range and close it at the bottom - put above 1105 sell put at below 1090 - basically like watching paint dry.

Joe

[Kallidromos]

Since we're at it

1929-1987=58
58*0.382=22.15
1987+22.15=2009.15
voila!!

February 2010 at the latest we are due for a major event Fibonaccology says. South that is, all the way to the Mississippi delta.

Kallidromos

[Nicolas]

Congrats Yelnik for your blog and your work in general.

These calculations are simply fascinating! thank you for this amazing post.

Regards from Switzerland.

[john walker]

Yelnick, Is this the same Virginia Jim who predicted that the market would top on Oct 16? (Hint: Yes.)

[cloudslicer]

BAC,JPM,WFC are trading poorly relative to the market over the past few days. The market did everything it could to pump the banks up over the last few days including a nice little ramp job on on the Russell and REITs but the BKX refused to break through 15.

It has become a very very simple market to figure out. It has all come down to the banks. They will decide new highs or roll over. The verdict should be rendered within hours or at most days.

[joe]

A good point and a good take Cloudslicer.

Joe

[Rob]

I would place more credence in a McHugh phi-mate turn date than this date and McHugh has no more phi-mate turn dates for 2009. I don't think the market is going to peak until early 2010, perhaps mid-January at which time P2 will be about 61.8% of the duration of P1.

[joe]

I am coming to the conclusion that we'll get the right count -when it is too late to do anything about it. That just happens sometimes - and no one should be using elliot without also using other tactics at the same time. And anyway - I don't think this is a p3 event coming - just a fairly big "correction".

This should take S&P under 1030 - with some resistance between 1055 and 1075 on the way down though - soon.

[Free]

Finally, someone who has been making comparisons with 1929, 1987, etc etc concludes the comparisons had 'failed'. Somehow, there are quite a many that are obsessed with a market crash and thus keeps trying to find evidences, comparisons to support their theories while ignoring the real market actions. So far their efforts have been quite useless.

[jeff]

I have Monday, Dec 21st, as the Day that the "Great Crap Rally of 2009" enters the History Books.

And, no, its not because of the Solstice, Fibos, or Elliot Waves.

Furthermore, 2009 has been the year of "HOPE".

And 2010 will be the year of "CHANGE"

Just like the Obama Campaign Slogan said.

[gem-x]

There's absolutely nothing complex about this formation. It's simple. Wave 1, Wave 2, Wave 3.

[yelnick]

Jeff - funny!! I do HOPE we have some CHANGE left in our pockets after next year.

[Kallidromos]

Correction.

It is 1987-1929=58. The rest of the math in my comment is OK.
By the way do you see what a funny number 58 is?

5+8=13 a Fibonacci number
and of course , 8=1,1618*5, approximately.

Kallidromos

[Kallidromos]

Wrong again.

It is 8=1,618*5

I should quit working beyond 2:00 am

Kallidromos

[philip swallow]

Anyone factor in the huge stimulus money coming in verses the corpaorate tax breaks expiring in 2010 ??

Seems to be more related. Besides, 1029 was an American crash w/o world interdependence of markets we have today. New world, new rules for new relationships, don't you think ??

[john]

Phillip Swallow
The 1929 crash was American but the Depression was world wide. Different countries fell apart over a period of time and there were different versions virtually everywhere.
Also, in regard to Jim Ross' spiral theory, I would say that in 1930 there wasn't the Plunge Protection Team that worked every which way to manipulate everything. Also,there are a lot more stocks today than in 1929 and the Wilshire and some other indices seem to have had a second lower high after Oct.19.(around the Nov 23rd date). It will be very interesting to see if the market drops sharply after Dec. 10-12

[mika]

Very interesting post, thank you yelnick.

Btw. 1.618, 2.618 and 3.618 often relates for peak of W3. Not necessary for W5. I assume W5 is a "folly" since many other technique won´t trade five waves movement instead tree of them.

Anything above of this like 4.226 and we are more handling end of W5´s.

W5 (possible fifth, truncated or not) is just for last fellows.

Windows Cleaning ahead ? Is there anything to clean for funds since SPX is up above 60%.

[bmccaw]

As for the analog, until we start to form a lower high 1929, 1987, current price still room to go higher. Unless we are seeing a high by this month, then follow by a big pullback and such pullback will last for 2-3 months without challenging the high, we will have a chance to see some meaningful selloff.

[Michael]

More failed numerology.
More failed TOP pickers!
:)