Aww shucks, I was hoping you'd break out the farmer's almanac and shed some new light on the moon cycles, lol. I'm half joking and half serious because I'm always learning something new here. I appreciate your updates and the cycle projections. I'm struggling with a major decline right now due to investor sentiment being elevated to the fear side and so much cash sitting on the sidelines. I follow your friend Larrry Williams work as well and I respect his annual forecast. Right now, I tend to lean towards his seasonality outlook for this year, but he doesn't have a projection software like you do. There's another contrarian, David Hunter who is calling for S&P 500 to 6,000 followed by and 80% decline. He seems like a smart man as well, but I can't see that happening at least until the end of this year or next year. We just haven't seen the euphoria & FOMO phases that would be expected, imo, that would send us into a real bear market. Maybe another black swan event will trigger it, maybe that's already starting to play out with the invasion hype. Who knows right, for now I'm staying in the markets but with one foot on the exit.

Thanks Peter! Another great update. No worries about only covering this specific aspect today. I actually enjoy it when you go in-depth on a specific area of interest like this. Plenty of ways to make or lose money trading even just one index. So, I appreciate it when you zero in on a target like this. Thanks!

Peter: I would like to sincerely thank you for the excellent work you are doing and in particular what you have presented over the last few days as it relates to the 1929 and 1987 crash analogy.

I feel this is an extremely important time in markets and the history that will follow, so I write the below for the benefit of all your subscribers who might read this and give you a sense of how well your work fits in with mine.

There are few technicians left with your level of knowledge Peter and market insight, and I must take a moment to express how thankful I am to be able to follow your work. I would also like to call your attention to some of my own work that highlighted 2022 for the beginning of a major bear market period, which could easily begin with a crash.

I have subscribed to your cycle projections since the week the service launched in 2020 and I previously followed your market letters for about 15 years before that. My first market letter subscription was to that of Richard Russell’s Dow Theory Letters. I continued to subscribe to Richard’s service until his passing.

I have followed the market and been a student of Technical Analysis for over 20 years, and while that is nothing in comparison to your history with the markets, I have some of my own work that is indicating a crash like setup. I was aware of the 1929 and 1987 lunar similarity. I first saw this mentioned years ago by either Arch Crawford or Richard Russell, but honestly I had totally forgot about it nor did I attempt to draw that correlation to the current time. I am sure you can imagine the “wow” moment I had when I saw the work you have presented.

For months I have been concerned about a crash like condition setting up for a number of reasons. For one, I do a lot of work with time cycles and Elliott Wave. On the time cycle side the very important 20 year cycle is due this year, which last bottomed in 2002. Furthermore, there is a 90 year Gann cycle I follow that is due this year that connects the lows of 1932 and 1842. I feel this 90 year cycle in the stock market is a lot more important than many realize, Gann originally spoke of it relating to the grain market, but it’s clearly present in equities as well and relates to numerous important lows (not highs). On the Elliott Wave side, a good case can be made we are dealing with the start of a very large degree top and we are entering a Wave 3 of a large degree Wave A, which often takes the form of a crash. This is the same as 1929, but of larger degree.

As we entered last year and with the market still rising, I was getting concerned that the market was simply running out of time to have an orderly decline that would cover enough price territory to balance the extremes being seen and also meet these cycles on the time side. Therefore, it seemed to me we are going to setup for one heck of a crash to get us there on time, unless these cycles are not operative this time around, but I wouldn’t bet on that until proven otherwise.

I would also like to point out that the Mars/Uranus crash cycle originally researched by Arch Crawford is currently active. I am sure you are familiar with this cycle. It occurs approximately every two years, and while the market certainly doesn’t crash or have major declines every two years, every single significant decline occurred while this cycle was active. I am unaware of a single case of a significant decline occurring when the cycle was not active and I have data on it going back to 1896 for the DJIA. This cycle became active in November 2021 and runs until March 2022, so this fits perfectly that a crash would occur during this timeframe.

In my opinion, the current setup is much more similar to that of 1929 than 1987, which in reality are the only two real crashes of the 20th century that involved large percentage declines in one to two trading days. This is significantly different than a bear market (i.e 2000-2002 and 2007-2009), which may very well have a larger decline over a period of time, but will be much more orderly. The 1987 crash brought the market down more in one day than some bear markets have in one year. The 2008 decline had an acceleration phase in October, but I could not see how it could be labeled a crash like that of 1929 or 1987.

I feel your presentation showing the high number of invalided upside price projections in 1929 helps confirm this observation. In the case of 1929, there was clearly much larger cycles at play that weighed so heavily the short term cycles could not fully play out. In the case of 1987 the crash low was the end of the bear market whereas in 1929 the crash was just the beginning of that bear market. Furthermore, the 1987 top was not accompanied by absolutely ridiculous extreme over valuation and excess like that of 1929 and today. This is a key difference. One must closely study the two periods and internal market conditions to fully understand what I am referring to.

It is my hunch that the lack of downside projections on the Russell 2000 as you detailed is further evidence of this. If a crash does in fact occur, I suspect what is going on is there are longer term cycles that are putting so much pressure on the market that it will simply pull the Russell 2000 right down and through the offsets that are below its current price and generate much lower downside projections. Peter, have you ever attempted to look at longer offsets? I’m talking in terms of many years or even decades?

Another observation thus far is I don’t feel internal market conditions are reflecting any kind of severe oversold condition. As someone like myself, who is trying to trade the current market, it feels like the market can’t believe it can decline and there is little concern, constant attempts to buy the dip, and failed rallies, which is creating volatility and mirroring 1929 trading action. I guess we will see where this goes, but it’s an odd feeling. This is subjective, but to me this is the type of psychology that creates a crash and panic when a sudden shift occurs. In Elliott Wave terms this is a third of a third wave, which I feel is setting up.

In closing, I totally agree we have the makings of a crash and while it’s impossible to be certain on any call, what I am certain is last year at this time for example we had none of the conditions that could setup a crash and we were missing a important precondition like the Mars/Uranus crash cycle. With this condition now in place, it is my opinion the likelihood of a crash is the highest it has been in years. I am simply unable to share charts and a detailed presentation of my work in a forum post, but I trust the above makes sense to everyone who reads it.

Because of my longer term time cycle work, and the endless extremes in valuation, speculation, and sentiment, I have known for a long time we would likely reach a generational top that will likely last for decades like that of 1929, the February 2020 top could have been a candidate, but my Elliott Wave work was clear to me it was a 4th wave and new highs would follow. When your price projection work confirmed that in the summer of 2020, I was sold on the validity of price projections. We are now in a 5th wave that’s most likely topped and we are dealing with a very different situation combined with time cycles. I can’t imagine that a generational top and low could occur in the same year, but my work suggests that could happen, though I would think a crash scenario sets up a 1929 path where we make a low, have some degree of an upswing and then embark on a much longer decline following a change in mood after a crash / panic.

What I do know, is I look forward to seeing what the price projections do throughout this period and how I can combine it with my Elliott Wave and Time Cycle work. I am still learning price projections and have a long way to go and I will continue to watch your updates daily.

Take care, Jim Victoria, BC Canada