June 2, 2023

MarketMap™ 2023 Issue #11

Failed selling events are hyper bullish, on the day.

I’ve been at this for many a long year and many good ones. I’ve seen almost everything, yet I am still learning daily. I admire my colleagues who have built original ideas – of which there are only a few – and my compatriots that have extended certain methods that are time tested. I hope to add my bit of wisdom to the TA body of knowledge, but I have – we have – much more to get through.

I started in the business with Dow at 575 and went to wall street in 1977 with the Dow still under 1000. Financial professionals were not highly regarded seen as used car salesman. However, my career blossomed as a market analyst and timer for brokers and their clients.

On the heels of the greatest recession since the great depression in 1975 I saw the growth trend in the demographics which John Marks Templeton imagined. When I called the low and breakout in August of 1982 it was Bob Prechter at EWI who predicted a Dow of 3500, which was laughed at by my best brokers and clients.

When getting as many people as possible out of risk in July of 1987 I never thought it would be the start of another 1929. While I found major tops easy to call, I did not see a secular bear market beginning like the ones that started in 1929 and 1966.

It’s not bragging when you did it, my publications saw the tops coming in 2015, 2018 (x2), and early 2020 (had no clue about Covid19) and again went off risk May 2021. I learned that people need time to adjust because they just don’t move out of stocks in one action like traders do. While they should.

But as of 11/19/21 and 1/4/22 the all-time highs (ATHs) of the Nasdaq and Dow respectively the great bull market is gonzo, except for its death rattles today. Spikes on the if-cum of AI, which many will not know when to exit.  The point is that the evidence of a secular high being in place and the start of a 10-to-20-year bear market is criminal to ignore. For you and your clients. Based on price and time here are the reasons.

1. EWT by rules has a completed secular bull market from the 1975 low. To correct over 45 years of bull market extremes is not a task finished by the modest sell off in 2022. You can do the math based on typical percent retracements. The risk of holding on to equities is high so that at least going to cash standing aside stocks for the next 6 months is reasonable. If wrong, you might have some egg on your face. Don’t use the AI rant as your missed opportunity excuse. There is no such thing as opportunity cost when you trying to dig out of 35% drawdown. Go to cash money funds and S-T bills and notes.
2. Gann’s timetable fits with this scenario as well, based on projections made in 1908 that included his prediction of 1929. His cycle work suggests from here for the next four years to be a full-fledged bear market. The Fed will follow the bond market with higher rates. Don’t count on QE, it may not work this time when nations are defending their currencies as the need to meet debt repayments grow.
3. My research uncovered the impact of the 18.8 nodal cycle that I pointed out in an earlier MarketMap™. I envision this cycle like a clock with nine years above the 9 o’clock and 3 o’clock horizontal and nine years below it. Above is growth and below is contraction. This cycle has been approaching the 3 on the clock for the past 18 months and will move below it on 7/18/2023. Another signal that time is running out on the grand old bull market.
4. Lastly, the charts featured in this issue are of the Juglar cycle. A nine-year cycle +/- a year that predicts market crest. It is well known and can be found by a simple google search. We posted a gif picture of the charts going back to 1920 into the current period to show the cycle’s effect. Here it is shown with precise dates from 2000. The year starting the new millennia and the beginning of the end of the baby boomers great bull market, notwithstanding financial repression forcing them to take unwanted risk.

The Juglar Effect

The featured chart above is the most current showing the 2015 crest cycling into today. I have a method isolating the time bands when it comes to market timing. The period for the crest started back in May becoming more influential from 6/5/23 to 10/9/23. The bands in 2015 were similar from 6/5/15 to 10/8/15.

My long-term members know 2015 period gladly. It was our first run of the short only scalping system. It is not a run all the time system but only engaged when the trader expects sharp declines.

Regarding the Juglar, going back to the 2007 market top the time window for a peak is highlighted in blue along with the fixed calendar date cycle arc pointing to the chart’s x-axis calendar. The amount of risk after a Juglar crest varies of course but I am not using the cycle in a vacuum here to suggest the timing is for higher-than-normal risk. That comes from other independent assessments.

The 1999 top happened in the same calendar period as the later ones discussed above. It is seen here highlighted in blue as well. Coincidentally the dot.com bubble made its massive high in that period, which is like the high in the FANNG Marco sector happening today, yet at a lower nominal high compared to 11/18/21.

When you compare the Nasdaq 100 to the Nasdaq composite, the FANNG bull market leadership showed its hand from May 2006 when it began its superior performance into today. What I call the Lazy Man’s Alpha was the buying and holding of fewer than 100 stocks able to beat the average. A similar phenomenon happened at the 1972-73 top with the Nifty Fifty stocks. Two tops the same smoke screen and warning, both followed by tail risk both different tail risks.

The table below is for your long-time reference showing the accuracy of Juglar’s timing. In 1860, Clemant Juglar first observed a general economic cycle lasting 8 to 10 years, based on his study of data on banking, interest rates, stock prices, business failures, patents issued, pig iron prices, and a variety of other phenomena.

Note, the 2020 crash was akin to 1987. They are both the fastest corrections in history in ongoing bull markets and had little to do with the natural business cycle, aka aberrations.

MarketMap™ 2023 Scenario Planner

I have no idea why the January fractal as I learned it and advanced it works. But it does and remarkability well like it did in 2022. There is no smoke or mirrors, no back fitting. The map inserted here remains unchanged since issue #4 was published 2/24/23.

This work by Jack Cahn is licensed under a Creative Commons Attribution-NonCommercial 4.0 International