Waving goodbye to profits on the markets
Caesar: "Who is it in the press that calls on me? I hear a tongue, shriller than all the music, Cry 'Caesar!' Speak. Caesar is turn'd to hear."
Soothsayer: "Beware the ides of March."
William Shakespeare Julius Caesar, I,
The Romans did not count the days of the month as we do now. Instead, three days in every month had names: Kalends (first day of the month); Nones (the seventh day in March, May, July, and October; the fifth in the other months) and Ides (the 15th day in March, May, July, and October; the 13th in the other months).
Then along came Julius Caesar, who implemented the Julian calendar. This established a 365-day year with a leap year every fourth year. The calendar lasted until modified by Pope Gregory XIII in 1582 to the one that presently applies throughout most of the Western world, apart from the Orthodox section.
Julius Caesar became a famous warrior, author, libertine and the elected dictator of Rome. Prior to that, in order to achieve his goal, he started the Gallic Wars (58-49 BC) and even ventured into Asia Minor in a conquest that was so swift he described it in three pithy words: "Veni, vidi, vici" ("I came, I saw, I conquered"). Bush used more words.
Then, just after his appointment as a perpetual dictator, he became the victim of friendly fire and was stabbed to death by his own countrymen on March 15, 44 BC.
Time for reflection
Since that time, the Ides of March has had an important predictive ability, as it often marks periods of what George Soros refers to as "reflexivity," whereby changes in perception cause changes in fundamentals, which, in turn, feed back to cause changes in perception. An implication of this self-reinforcing process is that once the trend reverses it will become self-reinforcing in the opposite direction. And the trend has reversed.
The Dow Jones Industrial Index (DJIA) peaked on January 14, 2000 at 11,722.98. Then it reached a closing low of 7,286 on October 9, 2002. This was a loss of 38 percent. Under Elliott Wave Theory this was the culmination of the first wave down out of a five-wave impulse pattern. The bear market rally, wave two, lasted far longer than predicted.
More than two years later, on Friday, March 4, 2005, the index peaked at a closing high of 10,940. On the following Monday it tried to close above the psychologically important 11,000 and managed to climb 27 points above this level before closing at 10,936, a rise of over 50 percent from the 7,286 low. This rise was not confirmed by the Nasdaq, the technology index, and the primary market for speculative and emotional investment.
The Nas100 peaked on March 27, 2000 at 4,704.73. Two years later, on October 7, 2002, it bottomed at 804.64, a fall of 83 percent. Then the index increased by 102 percent to peak on December 14, 2004 at 1,627. From then on, it has drifted lower even though both the DJIA and the S&P500 rose into March 2005. On the first trading day of 2005, this index began the largest single week correction since the bull market peak in 2000. In five trading days, the market gave back more than 40 percent of its gains for the entire year of 2004. In terms of market breadth, this was the worst decline since 1926 (as noted by Peter Eliades) in the Dow, and even more in the Naz100.
This decline continued through January and bottomed on January 24 at 1,494.
Beware the Ides
And now we come to the Ides of March. On Monday 14 the index closed at 1,515. On Tuesday 15, optimism prevailed and it opened five points higher to 1,520 but it closed at 1,502. Then on Wednesday 16, it broke below the January low of 1,494 to close at 1,486. This firmly suggests that significant lower levels are ahead.
The DJIA closed Monday, March 14, on a high note at 10,804.51, a rise of 30.59 points. On Tuesday 15, the Ides of March, it started to head higher and double topped at 10,884.76 in the morning. However, it fell solidly, closing at 10,745 with a loss of 59.19 points. Wednesday 16 pointed to what is to come. The index fell from the open, losing over 100 points in the first two hours. It staged a partial rally into noon before declining in the afternoon to close at 10,633.07 with a loss of 108.56 points. It breached 10,600 on Friday before rebounding.
Waves of loss
On Wednesday March 16, reflexivity had definitely arrived and the investors' appetite for risk certainly took a battering. Undoubtedly the markets will attempt a rebound over the next few days but this will fail and the ensuing decline over the next two years, wave three under the Elliott Wave Theory, will usher in depression and the seven-year period of 'tribulation' that the fundamentalists are anticipating, and with it the second coming. Cycles repeat.
Soothsayer: "Beware the ides of March."
William Shakespeare Julius Caesar, I,
The Romans did not count the days of the month as we do now. Instead, three days in every month had names: Kalends (first day of the month); Nones (the seventh day in March, May, July, and October; the fifth in the other months) and Ides (the 15th day in March, May, July, and October; the 13th in the other months).
Then along came Julius Caesar, who implemented the Julian calendar. This established a 365-day year with a leap year every fourth year. The calendar lasted until modified by Pope Gregory XIII in 1582 to the one that presently applies throughout most of the Western world, apart from the Orthodox section.
Julius Caesar became a famous warrior, author, libertine and the elected dictator of Rome. Prior to that, in order to achieve his goal, he started the Gallic Wars (58-49 BC) and even ventured into Asia Minor in a conquest that was so swift he described it in three pithy words: "Veni, vidi, vici" ("I came, I saw, I conquered"). Bush used more words.
Then, just after his appointment as a perpetual dictator, he became the victim of friendly fire and was stabbed to death by his own countrymen on March 15, 44 BC.
Time for reflection
Since that time, the Ides of March has had an important predictive ability, as it often marks periods of what George Soros refers to as "reflexivity," whereby changes in perception cause changes in fundamentals, which, in turn, feed back to cause changes in perception. An implication of this self-reinforcing process is that once the trend reverses it will become self-reinforcing in the opposite direction. And the trend has reversed.
The Dow Jones Industrial Index (DJIA) peaked on January 14, 2000 at 11,722.98. Then it reached a closing low of 7,286 on October 9, 2002. This was a loss of 38 percent. Under Elliott Wave Theory this was the culmination of the first wave down out of a five-wave impulse pattern. The bear market rally, wave two, lasted far longer than predicted.
More than two years later, on Friday, March 4, 2005, the index peaked at a closing high of 10,940. On the following Monday it tried to close above the psychologically important 11,000 and managed to climb 27 points above this level before closing at 10,936, a rise of over 50 percent from the 7,286 low. This rise was not confirmed by the Nasdaq, the technology index, and the primary market for speculative and emotional investment.
The Nas100 peaked on March 27, 2000 at 4,704.73. Two years later, on October 7, 2002, it bottomed at 804.64, a fall of 83 percent. Then the index increased by 102 percent to peak on December 14, 2004 at 1,627. From then on, it has drifted lower even though both the DJIA and the S&P500 rose into March 2005. On the first trading day of 2005, this index began the largest single week correction since the bull market peak in 2000. In five trading days, the market gave back more than 40 percent of its gains for the entire year of 2004. In terms of market breadth, this was the worst decline since 1926 (as noted by Peter Eliades) in the Dow, and even more in the Naz100.
This decline continued through January and bottomed on January 24 at 1,494.
Beware the Ides
And now we come to the Ides of March. On Monday 14 the index closed at 1,515. On Tuesday 15, optimism prevailed and it opened five points higher to 1,520 but it closed at 1,502. Then on Wednesday 16, it broke below the January low of 1,494 to close at 1,486. This firmly suggests that significant lower levels are ahead.
The DJIA closed Monday, March 14, on a high note at 10,804.51, a rise of 30.59 points. On Tuesday 15, the Ides of March, it started to head higher and double topped at 10,884.76 in the morning. However, it fell solidly, closing at 10,745 with a loss of 59.19 points. Wednesday 16 pointed to what is to come. The index fell from the open, losing over 100 points in the first two hours. It staged a partial rally into noon before declining in the afternoon to close at 10,633.07 with a loss of 108.56 points. It breached 10,600 on Friday before rebounding.
Waves of loss
On Wednesday March 16, reflexivity had definitely arrived and the investors' appetite for risk certainly took a battering. Undoubtedly the markets will attempt a rebound over the next few days but this will fail and the ensuing decline over the next two years, wave three under the Elliott Wave Theory, will usher in depression and the seven-year period of 'tribulation' that the fundamentalists are anticipating, and with it the second coming. Cycles repeat.
