MarketMap-2020 Issue #7 Spring
March 27, 2020
Event-Based Cycles (EBC)
The date of the peak – February 12 is near the demarcation of the winter season and the early spring season used to calculate this cycle. We anticipated the mountain to hit in what we call the late winter season with a cut off February 10, but the height hit on the 12th. Be that has it may the tidal formula we use has that peak nearly identical to the ones that occurred in 1906, 1934, and 1966. This does not throw any previous scenario based on EBC out the window as the peaks that happened in the early spring period produce similar-looking declines with a similar change of trend dates.
Here are two clear alternates for the shape of the decline. In the previous Market Map, I suggested that the peak of 1937 and the decline in 1938 fits the character of a potential all-time high of 2020 in the early spring season February through March season
However, what is different about 1937 is it was not a new all-time high, whereas 1966 was. Plus, the tidal factor lines up near perfect with the top on February 12, 2020.
In either case, the market is in a brae trend into October, where 1937 has a low in June a recover into August before a panic into October. The 1966 fractal is an ongoing downtrend, without much looking back.
MarketMap-2020 Scenario Map and Table.
I used the market map calendar to reveal in the last letter a scenario where a bounce would start around March 10, carrying prices higher into the next change of trend date (COT) dues between March 16 and April 1 for a near term perk before the trend continued lower. A segment of the calendar is shown again here.
If the scenario is in line with the 1966 bear market, a decline here will finish off the first leg of the bear market, followed by a S-T tradable rally into the April 14-28 time window expected to be a peak again, that fits the 1966 fractal leading to a panic in May. This month has the second most panics in history next to October.
The idea of panic or at least a one day fall that equals or exceeds the 13% range day decline on March 16 is expected. To key in on the dates to expect that challenge, the table below on the long bar dates will be helpful.
Key Long Bar Dates
Gann had a thing about anniversary dates. I refer to them as significant splash dates that ripple throughout history. The ten-year cycle provides the investor and trader with information that can easier be overlooked and had a tendency to repeat. The long bar range day that happened on March 16, 2020, is a prime example.
It is more than their occurrence in the first year of the new decade. Instead, they occur in the same mathematical calendar segment that runs from late winter to late summer and inside the last phase of TMT’s Tidal Cycle trading system.
In the table above, all of the highlights of the date in red occurred in the last half of the down cycle in the Tidal system. Therefore, a massive market pivot here in the 3/6 to the 4/1-time window should lead to a downtrend at least equal to the February 12-28 decline. Expectations are for climatic action in mid-May because that match’s the 1966 scenario and the long bar dates highlighted above.
Markets make lows, not on good news; they make meaningful lows of lousy news and climate action by the markets. So, while the bear market should reach into 2021, an I-T low is expected in mid-May.
Issue #1 of Market Map 2020 points out the recovery of the first year of a new decade as a year that contains the start of most year markets. Furthermore, from the year 1860, recessions have had their start all with an outside event trigger. In 1860 it was the civil war.
The above table shows the damage done in these years. I have averaged the number of profits taken – percent decline – and averaged the time spent in the bear mode throwing out the shortest and the longest. These numbers are very much in line with all bear markets over the last 120 years.
Going into 2018, I said ” the theme of greatness should continue.” In 2017 it was the most significant low volatility year on record. From February 6, 2018, the extension of the bull market made it the greatest of all times in terms of time and price. That market motif will carry into the bear market cycle. So Contrary Thinker expected it also to be the greatest of all times.
James Bullard of the St. Louis Federal Reserve has written a must-read conceptualization of the current situation.
The markets continued their rally for the third day.
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Great and Many Thanks,
Jack F. Cahn, CMT
A Thinking Man’s Trader Since 1989,
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