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A History of Autumn Stock Market Declines

The Dow Industrials have declined sharply every Autumn for the past eight years in a row, from 1997 through 2004, and it is setting up to do so again in 2005.

Five of the eight declines were stock market crashes, with declines greater than 15 percent, and a sixth was nearly a crash, plunging 13.2 percent! The smallest decline was still a significant 4.7 percent.

The declines typically started in the July/August period and lasted into the September/October period. Seven of the eight were declining over the autumn equinox, and all eight declined during the month of September.

Here's the data:

1997: A stock market crash that began on August 7th at 8,340.14 and fell for 57 days to a low of 6,936.45 on October 28th, a 1,403.69 drop, or 16.8 percent.

1998: A stock market crash that began on July 17th at 9,412.64 and fell for 32 trading days to a low of 7,329.70 on September 1st, a 2,032.94 plunge, or 21.6 percent. It hung around that low through October 8th, hitting a bottom that day at 7,399.78.

1999: A near-crash that began on August 25th at 11,428.94 and lasted through October 15th when it fell to 9,911.42, 36 trading days, a 13.2 percent sell-off.

2000: Another stock market crash, this one commencing September 6th at 11,401.19 and lasting until October 18th's 9,656.12 bottom, a 30 trading day plunge that saw prices fall 1,745.07 points, or 15.3 percent.

2001: Again, a stock market crash. It began on August 27th at 10,441.37 and lasted through September 21st, bottoming at 8,062.34, a 2,379.03, 22.7 percent bloodbath that took only 14 trading days.

2002: Again, the sixth stock market crash in a row if you consider the 13.2 percent 1999 wipeout a crash. It started innocently enough on August 22nd, at 9,077.01, and lasted until October 10th at 7,197.49. When the carnage was over, the losses were 1,879.52 points, or 20.7 percent.

2003: Even in 2003, when a glorious rally was in full swing, the Dow paused to follow tradition by dropping a measurable 4.7 percent, or 455.61 points from 9,686.08 on September 19th to 9,230.47 on September 30th.

2004: A significant 6.2 percent drop followed suit, markets in the tank from September 13th's 10,348.39 high to October 25th's 9,708.40 low, a 639.99 sell-off.

We have a rare Fibonacci double phi mate turn date window and a Fibonacci cluster window from September 12th through September 22nd (refer to last weekend's issue no. 209), which looks like a perfect setup for 2005's version of the autumn plunge. Get ready.

To know exactly when the 2005 autumn decline will begin, we have developed buy/sell signals with remarkable correlation to stock market price movements, including the Blue chip stocks, techs, and HUI Amex Gold Bugs Index. Serious Traders, Investors, Advisors and Market Students should find these buy/sell signals invaluable.

What are these unique signals and why do they work? We have two independent indicators for each of three major equity market indices: The large cap DJIA/S&P 500, the NASDAQ 100 (which mirrors the QQQQs), and the HUI Amex Gold Bugs stocks.

The first indicator is a Stochastic that measures price and breadth momentum. When a Fast measure of this Stochastic crosses decisively above a Slow measure of same, we get a momentum "buy" signal. When the Fast crosses decisively below the Slow, we get a "sell" signal.

The second indicator is a confirming Purchasing Power Indicator™. This proprietary indicator measures the "power" behind a stock market move. It considers price, but also other factors that are building blocks of supply and demand. This is an amazing tool that generates "buy" signals when the power behind a move is so strong as to suggest that the probability of a multi-week or significant multiday rally is very high. It generates a "sell" signal when it identifies when the power behind a move is strong enough to result in a multi-week, or significant multi-day sell-off.

Because there are no guarantees in life, one benefit of the PPI signal is that if the market decides to take a bizarre twist against the signals, this indicator is smart enough to pick up the changes quickly before too much damage can be done and reverse course.

There's no guessing with these signals: they are cut and dried indicators, objective. Opinions, judgments, and investor bias is stripped away. Correlation has been nothing short of remarkable.

Here's how we like to apply these signals: When both the Stochastic and Purchasing Power Indicators issue new "buy" signals, we like to take a long position in the expectation of a rally. When both generate new "sell" signals, we like to go short, or step out of the market and wait for "buy" signals to reappear, anticipating a correction lower. We recommend always using stop losses.

Unique to these indicators, they have done an amazing job identifying prolonged "sideways" moves in the market. The probability of a "sideways" move occurs when one indicator is on a "buy" and the other is on a "sell." We are not aware of any other market analysis service out there that identifies high probability "sideways" moves. This information is critical for options traders as options lose value during lengthy sideways moves. In the options buying world, Bears win, Bulls win, and Sideways lose.

If you would like a Free 30 day Trial Subscription to check out these remarkable buy/sell signals, simply go to www.technicalindicatorindex.com, and click on the "Contact Us" button, and email us with your request, including a password you would prefer to use to access our site. A subscription gains you access to these buy/sell signals, our thrice weekly Market Analysis Newsletters, Traders Corner, Guest Articles, and our Archives.

We integrate a broad base of technical analysis tools to help our clients build wealth. In addition to these buy/sell signal indicators, a subscription will gain you access to our newsletters that cover the major U.S. Equity, Bond, Commodity, Precious Metal, and Currency markets, using multiple tools simultaneously, including Elliott Wave Theory, Supply and Demand, Momentum Measures, Dow Theory, Chart Patterns, Cycles, Sentiment Measures, Fibonacci Ratio Measures for Price and Time turn-date targets, and Analogs of Current Price Behavior with the Past to name a few. Check us out today and start making money!

"If I shut up the heavens so that there is no rain, or if I
command the locust to devour the land, or if I send pestilence among
My people, and My people, who are called by My name humble
themselves and pray, and seek My face and turn from their wicked
ways, then I will hear from heaven, will forgive their sin,
and will heal their land."

2 Chronicles 7: 13, 14

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