Saturday, May 4, 2013

Entering a Puetz Crash Window for Stocks in May - June 2013


Steve Puetz studied a lot of market history regarding crashes and their proximity to solar and lunar eclipses. Crashes don't always occur in a "Crash Window", but pretty much all crashes that have happened occurred in a Crash Window.

Puetz used eight previous crashes in various markets from the Holland Tulip Mania in 1637 through the Tokyo crash in 1990. He noted that market crashes tend to be lumped near the full moons that are also lunar eclipses. In fact, he states, the greatest number of crashes start after the first full moon after a solar eclipse when that full moon is also a lunar eclipse. Once the panic starts, Puetz notes, it generally lasts from two to four weeks. The tendency has been for the markets to peak a few days ahead of the full moon, move flat to slightly lower --waiting for the full moon to pass. Then on the day of the full moon or slightly after, the brunt of the crash hits the marketplace. You can read more about Puetz Crash Windows at the Spirit of Truth blog.

As annotated on the charts below, the current configuration and spacing of solar and lunar eclipses is virtually an exact match to the configuration and spacing of eclipses in 1987 just prior to that market meltdown. I would say the major caveat that might argue against a crash in the late May to early July time frame is that this Crash Window is not occurring in the Fall of the year. Historically most, but not all, serious crashes occur in the Fall. We'll see soon enough.

The DJIA cash did hit the big 15,000 target for potential major top as posted earlier. Traders should be on maximum alert for a possible top and crash in the markets.

Kim Rice 5/4/13

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