GRAND SUPERCYCLE PEAK UPDATE

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From: (*Spirit Of Truth* WWW Page)
Path: UConnVM.UConn.Edu!JPA94001
Newsgroups: alt.philosophy.objectivism,alt.politics.economics,sci.misc
Subject: GRAND SUPERCYCLE PEAK UPDATE
Message-ID: <1776110543S...@UConnVM.UConn.Edu>
Date: Sat, 06 Apr 96 18:34:43 EST
Organization: world


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Date: Sat, 06 Apr 96 18:15:32 EST
From: *Spirit Of Truth* WWW Page <http://www.ucc.uconn.edu/~jpa94001>
Subject: Grand Supercycle Peak Update


THE GRAND SUPERCYCLE PEAK

By J. Adams
Updated: April 6th, 1996


"The S&P and NYSE indexes registered short-term peaks on
our ideal top date of Feb. 13-14 simultaneously with meeting
their Supercycle degree resistance lines. At the same time,
the DJIA exceeded its trendline and its upside target for the
great bull market by 3.5%."

-Robert Prechter

(From the March issue of the "Elliott Wave Theorist"-
cited in Barron's Financial Weekly, pg.MW50.)


Since America's birth around 200 years, collective expectations
have been climbing higher and higher. Rising expectations have fed an
almost continuous general rise in stock prices. Unfortunately, since
history moves in large-scale cycles, the odds are that the uptrend is
about to come to a violent end.
With the full moon this week (which involved a lunar eclipse
conjunct the Mercury and Mars and squared (90-degree) by Jupiter), the
DJIA reached an all-time closing high just below the 5700 mark and
started to reverse. Since all of the ingredients are now in place,
there is reason to believe we have just passed the Elliott Wave "Grand
Supercycle" peak in stock prices and an historic crash is about to
occur.

The recent surge in stock prices to the 5700 mark most likely was
a final "blow-off" to a Grand Supercycle peak above an Elliott Wave
Supercycle trendline. Since 1932, a distinct five-wave Elliott Wave
pattern has developed toward a final top in stock prices. The first
wave was a rise to Dow 194 in 1937. Then a wave-two "correction"
occurred into 1942. Next, an extended wave-three upswing took place
that carried the DJIA to the Magic 1000 mark in February of 1966.
This was followed by a complex wave-four correction that lasted until
August of 1982. Since the 1982 low, a final fifth-wave rise in stock
prices to a Grand Supercycle peak has been underway. By drawing a
line through the 1937 high at 194 and the 1966 top at 1000, a
trendline that runs above Dow 5400 at the current juncture becomes
visible (using a logarithmic chart of the DJIA). (Notably, this upper
trendline is parallel a lower trendline that can be drawn from the
1932 low-point through the 1982 low.) Thus, the Dow's all-time high
near 5700 this week appears to have been the high-point of a fifth-
wave breakout to a final Grand Supercycle top above a Supercycle
trendline running across the first-and third-wave peaks of the
Supercycle run-up in stock prices from 1932. (Notably, all of the
Elliott Wave turning points mentioned above, i.e., in 1932, 1937,
1942, 1966 and 1982, occurred around the time of major planetary
alignments.)
Importantly, that the stock market has just reached a Grand
Supercycle peak above a Supercycle upper trendline in the DJIA is
confirmed by the fact that the New York Stock Exchange (NYSE) and
Standard & Poor's (S&P) stock indices precisely reached their
respective Supercycle upper trendlines in mid-February. In other
words, if one draws a line through the relevant Supercycle turning
points for the S&P 500 and NYSE (on a logarithmic chart), then this
trendline runs to the high-point reached in these indices on February
13th of this year. Since hitting their associated Supercycle upper
trendlines, these indices have reversed course. This tends to confirm
that the Supercycle fifth-wave peak, and associated Grand Supercycle
peak, is being reached along the Supercycle upper trendlines for the
major stock market averages.

A strong indication that a historic grand Supercycle top is being
reached in the stock market is the pervasive optimism on Wall Street.
In recent months, weekly Investors' Intelligence polls of advisory
sentiment have shown the highest amount of optimism since the last
major peak in stock prices in January of 1994. At the extreme, more
than half of investment advice became bullish (stock prices are
expected to continue heading higher) while less than a third of
investment advisors were bearish (expecting lower prices). (Polls of
advisory sentiment appear in the "Market Watch" section of Barron's
each week and in the "Psychological Indicators" printed in Investors'
Business Daily everyday). As has been pointed out by successful stock
market investors like David Dreman, general optimism like prevails
today on Wall Street is a solid sign of an important top in stock
prices.
Investors' high expectations have fed into probably the most
overvalued stock market in history, another sign of a major top.
Relative to fundamental measures of value like corporate earnings,
dividends and book value, stock prices are at an unprecedented
extreme. In terms of the price-to-earnings ratio of stocks (PE), the
PE on the S&P 500 recently climbed above 19, whereas 14 is the
historic norm. Usually a rise in the PE above 18 is followed by stock
market crashes and/or major bear markets. Meanwhile, the average
dividend yield on the DJIA, which falls as stock prices climb relative
to earnings and dividends, recently reached the lowest level ever. As
the DJIA climbed above the 5600 mark, the dividend yield fell to
almost 2.1 percent. Normally, a drop in the dividend yield below 3
percent is considered a warning sign of major tops in stock prices
(see the "Psychological Indicators" box in a recent issue of
Investors' Business Daily). In addition to the stock market's high PE
and exceptionally low dividend yield, the price-to-book value of the
DJIA has broken above four. Again, this is an important indication
that stocks are about as overvalued as they can get.

Another characteristic of the current high in stock prices which
suggests the Grand Supercycle top is at hand is that the other major
stock market averages, including the Dow Jones Transportation and
Utility Averages (DJTA & DJUA), failed to confirm the record high
reached this week in the Industrial average.
According to Dow Theory, "non-confirmations" are a key signal that
a major turning point is close-at-hand in the direction of stock
prices. Non-confirmations occur when the DJIA reaches an all-time
high while other major indexes, like those for Transportation and
Utility stocks, do not. When the DJIA reached a new closing high near
5700 this week, the Transportation and Utility averages did not close
at all-time highs. The Utilities topped-out way back in October of
1993 while the Transports peaked above 2200 with the new moon in mid-
March. If the Transports close at a lower low than was reached a
couple of weeks ago in the average, then a Dow Theory "sell-signal"
will be registered that has historically signalled major turning
points in the stock market. (If one historically bought and sold
stocks according to Dow Theory buy- and sell-signals, then they would
have reaped a return almost 20 times that achieved from simply buying-
and-holding.) (Notably, one can check for Dow Theory buy- and sell-
signals with the charts of the Dow Industrials, Transports and
Utilities printed on top of each other in the Wall Street Journal each
day.)

A final, critical factor that suggests we are passing the final
Grand Supercycle peak in stock prices is astroharmonics.
Major turning points in the stock market usually occur around the
time of planetary alignments (typically within a month-or-so and with
a full or new moon). For instance, consider the planetary alignments
that occurred in December of 1929, April of 1932, April of 1937, June
of 1942, February of 1962, February of 1966, October of 1974, October
of 1982, August of 1987, July of 1990 and January of 1994. Around the
time of these alignments some of the most important stock market
reversals of this century took place. Just prior to a new moon/five-
planet alignment in December of 1929 and going into a November 1st
solar eclipse, the stock market crashed as the Great Depression began
(note that, in determining alignments, a geocentric perspective is
used and the sun and moon are considered planets). Soon after a new
moon/five-planet alignment in April of 1932, the stock market reached
a Great Depression low just above Dow 40. By the time of a new
moon/five-planet alignment in June of 1942, Hitler had marched across
most of Western Europe and stock prices reached a major World War II
low-point. With a total solar eclipse and alignment of seven planets
in February of 1962, stock prices reversed from record heights as the
Panic of '62 hit Wall Street and eventually drove the stock market
down by about a third. With a full moon just prior to a seven-planet
alignment in February of 1966, the DJIA tested the 1000 mark for the
first time in history (closing high: 995) and then reversed into a
bear market that lasted until 1982 in real terms. In October of 1974,
with a tight alignment of six planets, the momentum low was reached in
the vicious '73-'74 bear market and since that time stock prices have
stayed above that low (in nominal terms). Going into a five-planet
alignment in October of 1982, the DJIA bottomed below 800 and then
exploded through the Magic 1000 barrier as the great bull market began
that many believe continues to this day. On August 24th of 1987, the
Dow reached a peak with the new moon and five-planet alignment
associated with the so-called "Harmonic Convergence". Following that
peak, the October '87 stock market crash occurred just after a
solar/lunar eclipse pair. With a total solar eclipse and six-planet
alignment in July of 1990, the Dow sharply reversed from the 3000 mark
as the Persian Gulf crisis erupted. Lastly, following the tightest
alignment of seven planets in 300 years, the stock market peaked with
the full moon in late-January of 1994 and then entered a year-long
correction (see the article, "A Rare Planet Alignment Bodes A Bust For
Booming Stock Market", in the 1/12/94 issue of the Wall Street
Journal, p.B1)
The historical relationship between planetary alignments and stock
market extremes is particularly relevant to the most recent surge in
stock prices above Dow 5400, Dow 5000 and the 1000 mark in the Nasdaq
Composite index. When the Nasdaq Composite broke above the 1000 mark
for the first time in history last July, it did so just as a six-
planet alignment occurred (keep in mind that the sun and moon are
considered "planets"). Likewise, a seven-planet alignment took place
when the DJIA broke above 5000 for the first time in history with the
new moon just prior to last Thanksgiving. Finally, with a six-planet
alignment in mid-January of this year, the DJIA hit a short-term low
at Dow 5000 and then thrust above the Supercycle upper trendline that
runs across Dow 5400.
The planetary alignments last July and November and this January
apparently marked thrusts of emotional energy toward a climactic stock
market peak associated with a Spring Equinox planetary alignment that
occurred last month. With the new moon a day prior to the Spring
Equinox on March 20th, five planets aligned within a 10-degree arc
from the earth (the sun, moon, Mercury, Mars & Saturn). In
association with the March 19th new moon, the DJIA surged to an all-
time intraday high above 5700 and then pulled-back. Next, going into
the full moon this week, the DJIA came back to reach a new closing
high (but not an intraday high) that may prove to be the final Grand
Supercycle peak.
According to the "Spiral Calendar" developed by Chris Carolan, the
full moon this week was an ideal time for the Grand Supercycle peak in
stock prices. Using this calendar, which is based upon lunar cycles
and special "Fibonacci" timing relationships, Carolan projected more
than a year ago that early-April of this year should mark a major
turning point in the stock market. According to the Spiral Calendar,
the April 3rd full moon marked an important anniversary (keep in mind
this is according to a special lunar calendar) of key turning points
in mass mood and stock prices that occurred in June 1974 (solar
eclipse turning point into a crash), August 1982 (starting point of
current bull market), October 1987 (crash low), January 1991 (solar
eclipse low prior to start of Gulf War), January 1993 (full
moon/planetary alignment low) and April 1994 (primary low of most
recent major correction). (One can get an idea of how this works by
noting that there is almost perfect Fibonacci proportionality
associated with the time spans brtween the above turning point dates-
e.g., 1.618 multiplied the number of days between April 3rd, 1996 and
the October 20th, 1987 stock crash low equals the number of days
between April 3rd, 1996 and the August stock market low in 1982.)
Lastly, one should note that the February 13th all-time highs in the
S&P500 and NYSE at their respective Supercycle upper trendlines
occurred on a key Spiral Calendar anniversary of the historic stock
market tops in September 1929 and August 1987.

Summarily, with the DJIA's run-up to near 5700 this week, all the
ingredients have come together for an historic *Grand Supercycle* peak
in stock prices. First off, Elliott Wave Supercycle upper trendlines
have been reached in the major stock market averages. Secondly,
investor sentiment is very optimistic as reflected by extremely
overvalued stocks. Third, the all-time high this week in the DJIA was
not confirmed by new highs in other market averages like the Dow Jones
Transportation and Utility indexes. Lastly, this record high was
reached in association with a full moon/lunar eclipse immediately
following a Spring Equinox planetary alignment.


THE FINAL SUMMIT


"War to the hilt between communism and capitalism is
inevitable. Today, of course, we are not strong enough to
attack. Our time will come in thirty or forty years. To win,
we shall need the element of surprise. The Western world will
need to be put to sleep. So we shall begin by launching the
most spectacular peace movement on record. There shall be
electrifying overtures and unheard of concessions. The
capitalist countries, stupid and decadent, will rejoice to
cooperate to their own destruction. They will leap at another
chance to be friends. As soon as their guard is down, we
shall smash them with our clenched fist."

(Dmitrii Z. Manuilskii)
(Lenin School of Political Warfare, Moscow, 1931)


The key point to address now is what the current Grand Supercycle
top in the stock market implies. Since rising stock prices reflect
rising collective expectations and confidence, the current peak can be
considered an irrational extreme of popular optimism similar to what
occurred in society at the last Supercycle top in 1929. As history
records, this peak of optimism was followed by a vicious reversal and
wave of pessimism associated with the 1929 Great Crash, the Great
Depression of the 1930's and the second world war.
The "irrationality" of current collective optimism likely lies in
the popular perception of world peace when, in fact, a world war is
likely near-at-hand. The connection between the irrational hopes of
the West for world peace and the ups and downs in stock prices is
reflected by how recent major tops in the stock market and collective
expectations have occurred around the times of East/West summits. As
pointed out in my article, "The Final Summit?", the last three major
tops in stock prices over the past several years occurred around the
time of summit meetings between the leaders of the U.S. and Russia. I
believe this reflects how Western expectations are being intentionally
misled to irrational heights by Moscow in order to open the way for an
ultimate upset of expectations and Grand Supercycle crash, i.e., a
surprise third world war.
Notably, the connection between stock market peaks and East/West
summits appears to be relevant to the high-point in stock prices
reached in recent weeks. Current optimism on Wall Street has been
supported by a recent Middle East summit attended by Russian President
Boris Yeltsin and President Clinton. This summit truly may have
marked the final high-point in Western expectations associated with a
totally false peace in the world. Now comes the world war...