Hit and Run Morning Stock Report: August 2nd, 2022
By: Jeff Cooper
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Last month we mentioned the Biblical 40-year cycle from 1982.
A historic market low occurred on August 12, 1982.
The current period rhymes with that period as the early is when Volker had to step in and jack rates up when the prior Fed Chair pivoted, prematurely lowering rates after a hiking campaign in the ’70s.
Interestingly, we forecast a top in early January 2022 based on the 7-squared year or 48-year period from the early January 1973 top.
Likewise, August 1982 similarly resonates with the 50-year Jubilee period counting from the PRICE low in July 1932 following the 1929 crash.
This all ties to the 100-year Shmita Cycle set down by God.
God commands rest on the seventh day-- Sabbath.
This “rest” also applies to the cycles of weeks and years.
The cycle of seen sets of seven years (7 X & Shmita years) points to the 50th year-- Jubilee.
The year of Jubilee is based on letting the land rest every 7th year, known as the Shmita year. During this year Gold commands rest for both the farmer and the land…”Built the seventh year thou shall let it rest and lie still.” Exodus 23:11.
Israel has two calendars, religious and civil. The Shmita is based on the civil calendar which always begins on the Feast of Trumpets (SEPTEMBER/OCTOBER).
Shmita is like a two-edged sword because the impact of the Shmita is the wiping away of that which has been built up.
Shmita years are behind the rise and fall of America.
Let’s take a look at the incredibly accurate timing of the Shmita Year as it impacts modern history in finance and the markets.
1901-1902 Shmita Year-- 46% U.S. stock market value wiped out.
1916-1917 Shmita 40% U.S. stock market value wiped out. German, Austro-Hungarian, Russian, and Ottoman Empires collapsed. Britain, the world’s greatest empire was almost bankrupt. The beginning of American rise to world power. All during this one Shmita year.
1930-1932 Shmita-- 86% of the U.S. stock market value was wiped out in the worst financial crisis in modern history.
1937-1938 Shmita Year-- 50% of the U.S. stock market value was wiped out. Global recession.
1944-1945 Shmita Year-- end of German Reich and Britain’s hold on territories. Establishment of America as the world’s superpower.
1965-1966 Shmita-- 23% stock market value wiped out.
1972-1973 Shmita Year-- 48% U.S. stock market value wiped out. Global recession. The U.S. lost its first war-- Vietnam.
Is another Asian war on deck?
1979-1980 Shmita Year-- U.S. and global recession.
1985-1987 Shmita Yeaar-- 33% U.S. stock market value wiped out.
1993-1994 Shmita Year-- bond market crash
2000-2001 Shmita Year-- 37% U.S. stock market value wiped out. 9/11 and global recession.
2007-2008 Shmita Year-- 50% U.S. stock market value wiped out. global recession
2021-2022 Shmita Year ?
The Jewish New Year is in September.
This September markets will be weak.
That means we should be mindful of a top sometime in August.
August will conclude the rally from the mid-June bottom.
I have noticed that where there is a cluster of 5 or more prior tops or bottoms that are a Fibonacci number of trading days within a short period of time, a week or so, there is a strong likelihood and high probability of a meaningful turning point in markets.
This is called a Fibonacci Cluster turn window.
Such a window exists through August 9th, 2022.
There is a large cluster of 8 points.
August 3 is 13 trading days from the July 14 low.
August 5 is 34 trading days from the June 17 bottom.
August 9 is 55 trading days from the May 20 low.
August 4 is 89 trading days from the March 29 top. This was the secondary high so it’s important.
August 1 is 144 trading days from the January 4 PRIMARY TOP.
August 3 is 233 trading days from the August 30, 2021 top.
July 29 is 377 trading days from the January 29, 2021 bottom.
August 4 is 2,584 trading days from the May 1, 2012 top.
Notice that early August is a cluster that ties together the Primary Top and the secondary high.
As well, we know that the SPX Monthly Swing Chart turned up yesterday as soon as it could…on the first trading day of August.
The market “kicked back down." When a big wheel of time such as the monthlies turns at the very least a knee-jerk reaction is the presumption.
We’re getting it.
The trick will be to determine if it is something more…ie the start of a new leg down.
How can we get a clue?
The first dog whistle will be the 3 Day Chart.
If the 3 Day Chart turns down with 3 consecutive lower lows and it does not define a low soon in terms of time and price,
The market may be talking. It may indicate the top of this rally is in.
However, there are many factors that suggest there is more to run in August.
In sum, August has seen some historic turns:
The late August/early September DJIA peak in 1929. Of course, what most market participants don’t realize is that was really a secondary high in the sense that most stocks had topped a year earlier.
The end of August 2000 was the secondary top from the Bubble top in March that year.
Late August 1987 was the pre-crash peak that year.
That was 35 years ago and interestingly, 35 vectors on August 25 on the Square of 9 Wheel-- the high day in 1987.
Likewise, 1929 is 93 years ago and 92 is square October 24th, the date of the FIRST crash in 1929.
August should mark a Wave 2 corrective rally peak.
This fall should see a waterfall dovetailing with the Jewish New Year.