Wednesday, January 8, 2025

S&P 500 Post-Election Year Patterns by Political Parties | Robert Miner

Since 1949, the typical pattern of a Post-Election Year is generally flat until late March. The second and fourth quarters are notably bullish, while the first and third quarters tend to be less so. A significant correction in the third quarter is usually followed by a bull trend into year-end. Since 1981, the average trend in Post-Election Years has followed a similar structure but with consistently higher returns (average performance of all Post-Election Years since 1949 +8%, since 1981 +15%).
 
Spring Low – Summer High – Fall Low – Bull into Year-End.
 Post-Election Years with 1st-Term Democrats +14%, 1st-Term Republicans +1%.

That said, Post-Election Year returns have historically favored 1st-Term Democrats. Since 1949, there has been only one instance of a loss during a Post-Election Year with a 1st-Term Democrat, while 4 out of 6 1st-Term Republicans saw losses.
 
 Market Action in Post-Election Years under Republicans and Democrats since 1953.
Jeffrey A. Hirsch, January 14, 2025.

Data suggests caution in the third quarter during a 1st-Term Republican administration, and the first quarter is typically the worst-performing. Swing traders should wait for the Spring Low to occur between late March and early April before entering long positions.
Post-Election Years generally show strong second-quarter performance with a consistent bull trend from the Spring Low to the Summer High (which can occur as early as mid-May), with an average return of around 4%. The Summer High period, from June to August, sees positive returns only in about one-third of Post-Election Years. 
 
The third quarter often trends sideways or down into the Fall Low in late September, with an average decline of around 7% from the Summer High. Since 1949, only one Fall Low to Year-End period has resulted in a loss, compared to an average gain of 7.6%. Since 1981, every Post-Election Year has seen positive gains from the Fall Low, making the Fall Low to Year-End rally the most consistent trend. Since 1981, each Post-Election Year has closed above the lows of September, October, and November, even if some years briefly dipped below. 

Saturday, January 4, 2025

Kondratiev Waves Aligned with Solar Cycles | Leonty Miroshnichenko

If cosmophysical periods influence the climate, changes in crop yields, epidemic disasters, and creative productivity, it is difficult to imagine that these rhythms would not be reflected in the economy. The economic cycles discussed in modern literature on the dynamics of economic indicators are well-known space (natural) periods. It was through the study of variations in economic indicators that it was first understood that the dynamics of such a complex system are not described by a single cycle or rhythm, but by a set of cycles, i.e., a spectrum.

Data on Economic Conditions ("Kondratiev waves") versus Solar Activity (SA) shows that the turning points of
economic fluctuations are closely aligned with some maximums of the Wolf number. The dates of SA maxima
and minima prior to 1749 were reconstructed from indirect historical and geophysical data.

The spectrum of economic cycles exhibits a number of peaks, with the most significant periods being: 3.5, 5.5, 8.0, 11.0, 18.0, 20–22, and 54 years. Short periods (e.g., the 3.5 year Kitchin cycle) can have certain regional characteristics. On the other hand, long economic cycles must apply to the entire global economy. These include the long "Kondratiev waves" (54 years), named after the prominent Russian economist Nikolai Kondratiev (1892–1938). The graph above shows data on economic conditions ("Kondratiev waves") versus solar activity (SA). The turning points of economic fluctuations closely align with some maximums of the Wolf number. The dates of solar activity maxima and minima prior to 1749 were reconstructed from indirect historical and geophysical data.

Updated December 2, 2024.

The "Kondratiev waves" have been clearly traced in the world economic system since the early eighteenth century, appearing in many indicators simultaneously—such as industrial production, wholesale prices, and the number of innovations in industry and agriculture. Although the parameters of these fluctuations change slightly, reflecting evolutionary changes in the world economy, the cyclical nature persists to the present day. There are various theories about the origin and nature of these fluctuations, which indicates that the issue remains unresolved. In this book, we are primarily concerned with the possible connection between the "Kondratiev waves" and solar activity and ecology. In other words, the question arises: Is there synchronism between the peaks of the "Kondratiev waves" and the cosmophysical parameters?

» On average, the difference between the peaks and troughs of solar activity and economic cycles does not exceed six months. «
88% of recessions since the 1800s and 100% of major financial crises occurred during the downturn of sunspot cycles. 

The answer is illustrated in the first graph above. It shows the positions of the extreme points of the long "Kondratiev waves"—their maxima and minima (peaks and dips). These points are determined by analyzing a large dataset characterizing the state of the world economy since the end of the seventeenth century. In this analysis, we considered the results obtained by representatives of various economic schools, each using their own independent economic indicators (indices). The turning points in the trends of the global economy are marked with arrows, and circles indicate the positions of the solar activity (SA) maxima. Dark circles represent those SA maxima located near the extreme points of the "Kondratiev waves," while light circles represent the others.

As shown in the first graph, in only two cases out of 11, the difference between the dates of the black circles (SA) and the dates of the economic peaks and troughs is 3 years. On average, the difference does not exceed half a year. Thus, changes in the world economy are clearly associated with variations in solar activity: when trends in the development of the world economy change, they are almost certain to occur at the maximum of the solar cycle. The pendulum of the economy swings in sync with solar fluctuations. Whether economic oscillations with a half-century period are self-oscillations or exogenous rhythms is secondary. It is evident that the world rhythm is introduced into the economy by Nature.

 
IZMIRAN (ИЗМИРАН – Institute of Radioastronomy and Applied Physics) is an institute within the
Russian Academy of Sciences (Российская академия наук), located near Moscow.
 
The average 11-year sunspot cycle can vary in length, ranging from eight to fourteen years. This cycle occurs due to the Sun’s magnetic poles flipping—north becomes south and vice versa—approximately every 11 years. About 11 years later, the poles reverse again, making the full solar cycle actually a 22-year phenomenon (Hale Cycle)
 
See also:

Wednesday, January 1, 2025

S&P 500 Post-Election Year Seasonal Patterns │ Jeff Hirsch

The Earth at Perihelion │ January 4, 2025

According to Kepler's Second Law, the line connecting the Earth and the Sun sweeps out equal areas in equal times, causing the Earth to move faster when closer to the Sun and slower when farther away (Law of Equal Areas).

 
The Earth is furthest from the Sun and moves slowest at Aphelion, which occurs about two weeks after the June Solstice, around July 3-5, when the Earth is 180° away from Perihelion. Perihelion, when the Earth is closest to the Sun and moves fastest, occurs around January 3-4, about two weeks after the December Solstice. 
 
 
In 2025, Perihelion in New York City will occur on Saturday, January 4, at 8:28 a.m. EST, a day before the "Slight or Minor Cold" Chinese solar term (小寒) on Sunday, January 5, and when the short-term trend in US stock market seasonality typically changes. Both Friday, January 3, and Saturday, January 4, are Cosmic Cluster Days.

2025 Outlook on S&P 500, Cryptos, Currencies, Metals & Energy │ Namzes

In 2025, the S&P 500 is expected to head toward a multi-year major market top. The overall structure of the S&P 500 is forecasted to rise until mid-January, followed by a correction of more than 10% into late February or mid-to-late March, and then a melt-up into a major top in mid-July or late-August. This will be followed by an approximately 17% drop into late October that will trigger a bear market.

 
S&P 500 projection for 2025 (timing, not magnitude) with seasonally strong windows in the bottom panel.

The S&P 500 is projected to rise until around January 17, reaching approximately 6,250, then experience a 10%+ correction by the end of Q1, targeting around 5,600. Key buy points are expected around February 26 and in the second half of March, with the ideal date being March 28, which will set up the final leg up. A minor buy point is likely around June 27. 
 

The major top is anticipated around July 17, with the possibility of a lower high or a double top/divergent high by August 22, with a minimum target of 6,500 and an upside target of approximately 7,000. After this, the market is expected to drop into a low around October 27, aligning with seasonal and nested cycle lows, followed by a bounce that ultimately fails. The S&P 500 is expected to end the year in the red, setting up for a challenging 2026, with a year-end target of 5,650.
 
In 2025 we face a conflict between the Decennial Cycle (years ending in "5"), which is typically the best year, and other cycles that suggest the market will peak in 2025. I will provide commentary on each cycle, starting with the 3.5-Year Kitchin Cycle (41-Month Cycle)
 
1.) The current Kitchin Cycle began in October 2022 (when we accurately called the bear market low), and 2025 will be year 3, which usually marks the peak. After that, the market is expected to decline into late 2026, which aligns with the ideal low of the next 3.5-year cycle. 
 
 2025 will be year 3 of the 3.5-year Kitchin cycle.

2.) Looking at the 4-Year Presidential Cycle, 2025 (the first year) is expected to follow a pattern of a spring dip, a summer rally, and a fall crash. I believe this is the key setup for next year, followed by the second year (2026), which is typically the weakest in the 4-Year Cycle. 
 
3.) The longer 18.6-Year Cycle is entering its peaking window in 2025, or possibly 2026. We are entering year 17 of the cycle, so we should begin watching for signs of a top, such as a marquee event like the SpaceX IPO. Market tops are a process, but we should start looking for indicators like weakening economic data, deteriorating market breadth, and earnings rolling over.
 
 The 18.6-Year Cycle is peaking in 2025, or possibly 2026.
 
4.) The Decennial Cycle shows that years ending in "5" are typically the most bullish in the 10-Year Cycle and rarely have negative returns. However, I believe we may have pulled some of the gains from 2025 into 2024 (since year 4 usually experiences sideways consolidation, setting up a blow-off top in 2025). Given the strength of the Decennial Cycle, we must be mindful that the fall of 2025 could be stronger than I currently anticipate. The average seasonality for year 5 is shown in the second chart.
 
 Years ending in "5" are typically the most bullish in the 10-Year Cycle.
 
 A close-up of the typical Year 5 seasonality.

5.)
I analyzed the years within the 4-year cycle pattern and identified the 11 most similar years, based on a high correlation score and comparable structure. From this analysis, I created a composite historical projection, shown in green. I’ve also included the composite 4-year cycle for reference, and you can see that the best-matching years closely follow the typical 4-year path.
 
The green composite line represents a historical projection based on 
the 11 most similar years within the 4-year cycle pattern.

6.) The 5-Year Liquidity Cycle, proxied by the M2 year-over-year (YoY) change, is expected to peak in the second half of 2025 and then decline until late 2028 or early 2029. The Reverse Repurchase Agreement (RRP) is nearly drained, and while the Treasury General Account (TGA) could provide a temporary boost if it’s spent down, the Fed will soon halt Quantitative Tightening (QT). However, other central banks can't ease much due to the strong U.S. dollar. Maintaining historically overvalued equities will require a significant liquidity injection.
 
 Maintaining historically overvalued equities will require a significant liquidity injection.

The ideal bottom of the 5.3-year inflation cycle falls around the end of 2025. It largely depends on oil, which should begin its multi-quarter run sometime in 2025:
 
 The bottom of the ideal 5.3-year inflation cycle falls around the end of 2025.

7.) On the macro front, GDP growth is expected to peak in mid to late 2025, with rising unemployment signaling a recession in early 2026 or late 2025. The 5-year liquidity cycle is expected to peak around mid-2025 and roll over, which will create challenges for overpriced equities and crypto. The Fed’s actions regarding liquidity will be crucial, particularly if it continues supporting asset prices without real economic justification. 
 
 GDP peaking phase around mid to late 2025.

Bitcoin will experience a deep retest into a March 2025 low, followed by one more run at the 2024 highs in early summer, after which crypto will enter a multi-year bear market. In my opinion, there is a high probability that the next 4-year cycle (2026+) will be left-translated, with Saylor and MicroStrategy (MSTR) being liquidated and the Tether-fraud (USDT) likely exposed. Meanwhile, almost all altcoins will lose 99-100%. It is currently unclear whether Bitcoin will act more as a NASDAQ proxy or a monetary hedge in the years ahead. Many altcoins may have already peaked for the cycle, but some, like Ethereum (ETH), still have more upside.
 
The Dollar is likely to remain in an uptrend into 2025-26. There is a potential pullback early in the year, helping risk assets push higher, followed by a rally into spring (and a subsequent sell-off in risk assets). Then, a big correction in the USD is expected into the July-August low, which should coincide with the stock market top.
 
In the Euro, an 18-month cycle low is due and will likely occur around March 2025. The subsequent 18-month cycle is likely to be left-translated, with a drop into the 2026 four-year cycle low, targeting below parity with the dollar.
 
 EUR going to crash into 2026 low.

The Yen is expected to begin a multi-year uptrend, leading to trillions in capital flowing back to Japan in the years ahead.
 
 » ¥ strength leading to repatriation or repatriation leading to strong ¥? «
 
Bonds remain in a secular bear market, so any rally in bonds will be cyclical (driven by a growth scare or recession), followed by a significant rally in rates. A potential counter-rally in bonds is expected in Q1 2025, but it is likely to fail. The technical target for TNX is 5.5%.

Given that 2022 was the 8-year cycle low in Gold, we now have a bullish intermediate and long-term bias. There is a potential low in the spring around the 2,400 support, followed by a push higher towards 2,800–3,000+ into 2026. Central banks won’t stop buying as the war cycle and geopolitical tensions intensify, while governments debase currencies.
 
 Gold upward bias from Q2 2025 onwards.
 
Silver is expected to reach 38.00 within the next 6 quarters.

All energy should be in an uptrend over the next 6-8 quarters, with Natural Gas likely leading (reaching a new all-time high in 2026).  
 
 
The next best entry opportunity in Natural Gas is likely to occur
at the end of January to early February 2025, with a confluence of
the 100-day cycle low and the seasonal low. The above is composite
cycle chart from December 3, 2024 for reference.
 
The 3.5-YearCrude Oil cycle (left chart) is starting with long consolidation. 
Leading indicators (second chart) pointing to expansion move due in 2025-26. 
 
Crude Oil is expected to reach the 80 in the spring of 2025, then 100, and 150 by 2026. 
 
» Energy will outperform after big tech tops. «   

My Crude Oil leading indicators and cycles suggest a big move in the next 2 years, but the exact timing of the expansion is hard to pinpoint, potentially around the end of 2025 into 2026. [see also HERE]. Uranium is likely to return to 100+ in 2025, and Coal should also see gains.
 

Saturday, December 28, 2024

The Function of Remembering | Chris Marker

I will have spent my life trying to understand the function of remembering, which is not the opposite of forgetting, but rather its lining. We do not remember. We rewrite memory much as history is rewritten. How can one remember thirst?

 » How can one remember thirst? «
 
»
I’m writing you all this from another world, a world of appearances. «

I wonder how people remember things who don't film, don't photograph, don't tape. How has mankind managed to remember? I know: it wrote the Bible. The new Bible will be an eternal magnetic tape of a time that will have to reread itself constantly, just to know it existed.

Solar Activity and "Violence-from-Below" Events | Suitbert Ertel

Alexander Chizhevsky's 1921 claim of a relationship between solar activity and revolutionary mass behavior is examined. A Master Index of Violence-from-Below Events (MIVE) is compiled, consisting of 2,101 events and 4,000 references extracted from 18 historical sources (chronologies, timelines, etc.) covering the period A.D. 1700–1985. [...] The relationship between solar activity and violence-from-below is found to be highly significant (p < .001). 

A.L. Chizhevsky (1897–1964), Russian scientist, Soviet Gulag prisoner, and founder of heliobiology, a field dedicated to
studying the impact of solar activity on biological, social, and psychological processes. His work spanned experimental
biophysics and hematology (structural analysis of blood). In addition to his scientific pursuits, Chizhevsky wrote poetry,
engaged in literary criticism, and taught history and archaeology.
 
At the 1926 Annual Meeting of the American Meteorological Society, an American participant delivered a paper written in 1921 by Alexander Leonidovich Chizhevsky, who was then a 24-year old Russian scholar. Its bombastic title "The Influence of Cosmic Factors Upon the Behavior of Organized Human Masses, as Well as Upon the Universal Historical Process" appeared laughable. The author claimed that occurrences of social unrest, rebellions, upheavals, revolutions are significantly correlated with solar activity, i.e., with the ups and downs of magnetic turbulence of the sun. In his own words: "The greatest revolutions, wars and other mass movements which have created nations, have given origin to the turning points of history, and have shaken the life of humanity and entire continents, tend to coincide with the periods of the maxima of the sun’s activity". [...] Since 1958, after being rehabilitated from Stalin's Gulag system, Chizhevsky has been acknowledged in Russia and elsewhere as the founder of the discipline of "heliobiology." By then some of his claims had appeared less vaunting and more admissible, especially in medical science circles: Typhus, influenza pandemics, cholera, and other epidemic diseases, as well as the morbidity of animals, were alleged to be correlated with solar activity. Chizhevsky's major claim, however, the correlation of turning points in human history with solar maximum conditions, was deemed unthinkable.
 
Secrets of the Sun — A.L. Chizhevsky's legacy.

[...] In line with Chizhevsky’s hypothesis it is assumed that human behavior, if correlated at all with solar activity, would turn spontaneous and impulsive under helioactive conditions among many people at the same time. The probability of mass activation would increase. Therefore all events indicating "violence-from-below" are regarded pertinent, i.e. spectacular attempts by large groups of people at enforcing changes of their living conditions. The category "violence from below" has been adopted from Johan Galtung who distinguished between (1) violence from below (revolutionary violence); (2) violence from above (counter-revolutionary); (3) horizontal violence between equals over some incompatible goals; and (4) random violence, related neither to interests nor to goals. 
 
» An event is coded violence-from-below if the chronology
refers to it by one or more of the above verbal labels.
«
 
 » The idea of Q-analysis is simple. If historical events are independent of solar activity, their temporal distances from
the nearest solar maximum should be random. Even though a revolution might coincide with a solar maximum due
to chance, this should occur relatively infrequently. For larger numbers of historical turning points, temporal distances
from solar maximum years should not differ from chance expectation. The same applies for solar minimum years. «

Unlike Chizhevsky, we did not lump events of Galtung's four categories together. Thus, all horizontal violence acts were not considered, such as territorial or international wars, which are generally not launched by the people but by institutional authorities. Violence from above was also excluded, except if such occurrences indicated preceding acts of violence from below. Galtung's random violence events (Category 4), such as massacres and pogroms—however rare expressions of mass unrest—were also included. [...] Palace revolts, coups d’états, and similar instances of violence without involvement of the ruled masses remained unconsidered, as well as individual acts of violence directed against authorities without apparent involvement of a larger population (e.g., assassination, terror acts). [...]
 
Conclusions
Evidence has been accumulated in this study supporting the claim of Chizhevsky of a connection between solar activity and violence-from-below. A comprehensive Master Index of Violence Events (the MIVE database) was compiled, and influence of bias was strictly excluded. The procedure of analysis circumvented methodological artifacts arising from autocorrelations. In addition, the distribution generated by randomizations allowed for straightforward significance judgments. Finally, results obtained from genuine data were compared with results obtained from various controls. It turned out that the hypothesized connection between solar activity and violence-from-below is positive (the more solar activity, the more social violence), and the correlation is generally not lagged. 
 
 » The more solar activity, the more social violence, and the correlation is generally not lagged. «
A p-value of less than 0.001 indicates the very strong statistical correlation between solar activity and violence-from-below, 
making the result highly reliable, with the likelihood of the relationship occurring by chance being less than 0.1%.

In sum, history text references to violence-from-below events tend to coincide with the years of maximum solar activity. However, a number of ensuing problems need to be solved:
  1. Physical Variables: Which variables are actually effective? Are solar emissions responsible? Are mediators like geophysical disturbances or climate involved? Solar activity effects on the world’s climate are too small and too slow to explain unlagged revolutionary behavior. Geomagnetic influence is somewhat more likely, but cycles of geomagnetism peak about two years later than solar cycles. Cosmic radiation, whose intensity is attenuated by solar magnetism, might be an effective variable.
  2. Physiological Variables: Which psychobiological structures underlying violence-from-below are responsive to such hidden stimulation? Neural structures for sensory or subsensory perception, for emotional processes, or for cognitive processes?
  3. Effect Size: How strong are solar correlated (external) factors compared to social-political dynamics (internal factors)? The external factors are apparently strong enough to emerge despite internal political dynamics. If the external effects were weak, they would be diluted.
  4. Effect Limitations: Why is solar maxima not always associated with violence-from-below? Why did high violence-from-below sometimes emerge despite low solar activity? Historical incidences of unexpectedly high or low violence — “unexpectedly” in view of deviating solar conditions — might be of foremost interest for investigating the range of heliodependence of social-political dynamics. 
  5. Concomitants: The role of revolutionary events in broader societal and historical contexts must be considered. Long wave oscillations have been claimed between liberal and conservative worldviews, and economic cycles of the famous Kondratiev type ought to be put into perspective. The connection between violence-from-below with conflicts of horizontal extension (international wars) needs investigation.
  6. Generalizations: Revolutionary movements are generally seen as expressions of new ideas rather than as blind valves releasing stowed-up aggressions: “Revolution is ... a war of ideas”. The question arises whether ideational activity in other domains, aside from the social-political domain, may oscillate with changing solar activity-related conditions.
  7. Present and Future: How strong is solar activity in 1996? We find ourselves in the midst of a solar minimum. Applying our above observations, we may be tempted to conclude that presently the probability of major world revolutions is low. The most recent turning point in contemporary history occurred in 1989, a solar maximum year. The 1989 revolution brought to an end an era whose beginning was the Bolshevik Revolution of 1917, a solar maximum year. The next solar maximum is expected for A.D. 2000 or 2001. The probability of revolutionary upheavals on this globe should then be greater. It seems advisable, however, to postpone predictions and to rather await further conclusions from research conducted by macroecologists, i.e., by a team of experts from all those disciplines of science, social science, and history whose contributions to solving the solar activity riddle are badly needed. Regrettably, such a team does not yet exist, but researchers in chronobiology/chronomedicine and in biogeomagnetics are not far from setting the stage: "An international and truly interdisciplinary effort will be required to ascertain the validity of biogeomagnetics ... to scrutinize physiological harbingers and their possible correlations with 'space weather' parameters."