1. By the Bradley Siderograph that would be 22 June:
2. By Eurodollar COT it would be now:
3. By the historic seasonality of geomagnetism it would be June or July:
6. Using MRCI’s historic matching tool, 1987 is the closest mirror, which kept rising until October at which point it made one the biggest crashes of all time:
7. To add to that, the lunar/solar eclipse configuration of 1987 which occurred prior to that crash matches this year but instead falls now in May-June, and this is the basis of Puetz’s crash windows:
8. Gann Global draw out the closest historic rhymes as the 1950s and 1920s. The former suggests a retreat is overdue, the latter that the market can keep going until August:
9. The Presidential cycle echoes the projection for an August top:
10. By my work, the closest historical mirror is 1946-7. Stocks topped in Q2 1946, with money switching from that point to commodities. With a normal lag in feeding through, inflation took off as of July 1946 and was elevated for 2 years from then, through the solar peak of May 1947.
Note treasury yields reversed course along with stocks topping, and commodities took over. Note also though the backdrop to this was the lifting of price controls and the Fed reducing its control over the treasury market.
OK, it’s up to you to decide which of the above are valid, if any, as forecasts for a market top. I am not convinced by some, but it does no harm to round up and compare. But I’ll summarise like this. There are generally two types of tops, parabolic peaks that collapse down the other side, or topping processes that are rounded lasting several months. The move in (US) stocks is starting to be parabolic. If this continues and steepens – and some of the models have room for further gains into June, July or August, to allow this – then we might rather expect an ugly subsequent collapse once ‘everyone is in’. If on the other hand we see a pullback shortly and this turns into a topping process, then we can look for a range to be carved out near the peaks whilst internals, and leading indicators, deteriorate. Perhaps most usefully, all the models, bar none, suggest a top should occur between now and August.
Milton Friedman wrote a paper on investor reactions to the 1940s and 1950s government policies – which were similar to today (ultra low rates, interfering in the bond market) – and concluded that the rise in equities into 1946 was not considered durable by investors because of the government artificial supports. That would suggest the current rally in stocks may be on borrowed time, as there has been as yet no reversal in policy, and in fact recent global actions have been to double QE in Japan and drop interest rates yet further in various countries.