Wednesday, April 3, 2013

The Flash Crash Cycle


http://www.safehaven.com/article/29369/the-flash-crash-cycle

The 5/6/10 mini Crash became known as the Flash Crash. I discovered this cycle back in 2010, when the Flash Crash occurred, which is why I named it the Flash crash cycle. This Cycle has been in the markets ever since the crash of 4/14/00 Low. I was amazed, when I first discovered this cycle to find it was a perfect 360 Trading Days (TD) Cycle, like the 360 degrees of a Circle (Cycle), it suggested that this fixed Cycle was found at major turning points.


The Flash Crash (FC) Cycle is a fixed 75 wk/525CD/360 TD (degree) Cycle that was ideally due 3/23/13 +/- 1 month.


04/14/00L -358- 9/21/01L - 369/77- 3/12/03L -359 - 8/13/04L- 1078 (3X 360
=1080) - 11/21/08L-356/521-4/26/10H-364/526-10/4/11L-3/23/13 +/-Mo.

Some of the 525 CD/75 week cycle Lows were major Panic Lows, like the 4/14/00 Low, 9/21/01 Panic Low and the 11/21/08 banking crisis Low, although some were not all that "flashy", like the 3/12/03 Low and 8/13/04 Low, but still they were major Lows.

The Flash Crash cycle in details
04/14/00L - 09/21/01L = 525 CD = 75 weeks = 2.618 X 200 CD = 523.6
04/14/00L - 03/12/03L = 1062 CD = 2.02 X 525 CD = 03/12/03 Major Low
04/14/00L - 08/13/04L = 1582 CD = 3.01 X 525 CD = 08/13/04 Major Low
04/14/00L - 11/21/08L = 3143 CD = 5.99 X 525 CD = 11/21/08 Major Low,
04/14/00L - 05/06/10L = 3674 CD = 7.00 X 525 CD = 05/06/10 flash Crash,
04/14/00L - 10/14/11 = 4200 CD = 7.98 X 525 CD = 10/04/11L, Major Low.
Next → 04/14/00L= 4275 CD = 9.00 X 525 CD = 03/23/13 +/- Month

Looking back at all the FC Lows, we notice the next 75 wk Cycle Low is due 3/23/13L +/-month, in April 2013.

7 out of 9 FC Cycles saw 7%-26% (avg 12-14%) declines and most are in 2-3 wks
03/24/00H - 04/14/00L was a 14% decline in 3 weeks
08/31/01H - 09/21/01L was a 20% decline in 3 weeks
01/31/13H - 03/12/03L was a 16% decline in 8 weeks
06/24/04H - 08/13/04L was a 7% decline in 7 weeks
11/04/08H - 11/21/08L was a 26% decline in 3 weeks
4/26/10H - 05/06/10L was a 12% decline in 3 weeks
9/16/11H - 10/04/11L was a 12% decline in 2 weeks

7 out of 9 (78%) of the Flash Crash 360 TD/75 week Cycles saw sharp 12-14% declines, (2 of 9, 22% did not see any decline) mostly in 2-3 weeks some time in April 2013 Lows. Some were not "flashy", like the 3/12/03L and 8/13/04L, but were still major Lows.

Perfect (exact) 360 TD (degrees) Harmonics:
04/14/00L + 3240 TD (9 X 360 TD) = 03/07/13
09/21/01L + 2880 TD (8 X 360 TD) = 03/05/13
03/12/03L + 2520 TD (7 X 360 TD) = 03/18/13
08/13/04L + 2160 TD (6 X 360 TD) = 03/15/13
11/21/08L + 1080 TD (3 X 360 TD) = 03/13/13
05/06/10L + 720 TD (2 X 360 TD)  =  03/19/13
10/04/11L + 360 TD (1 X 360 TD)  =  03/13/13

It is interesting that so many (7) 360 TD degree Harmonics are all due in March 2013.

Conclusion Flash Crash (FC) cycle: As the Flash Crash (FC) Cycle is a 1 1/2 year fixed cycle, it will have a variance of a month, which means we can see the FC decline in April. Ideally the FC Low is due in April 2013. Once the major High is determined by the more precise dominant Cycle1, we will then see a swift 2-3 week, minimum 7% to average 12% decline most likely into the April Lows.

Even though there are good odds, it does not matter if a 7-12% Flash crash (FC) cycle occurs or not, what matters is that the dominant Cycle1 (http://timeandcycles.blogspot.com/2013/04/cycle-review-and-update.html) determines when exactly we should be long and then short if and when the FC does occur. 

22 comments:

sailtoday said...

Ian,
Superb research on the FC. Thanks much for posting it. Keep up the great work! My particular wave pattern sez 3/16-24/2013, but based on today's action, it may be coming earlier, although I wouldn't discount an afternoon rally, to be followed by another dive next week.

sailtoday said...

Ian,
Superb posting of your research on the FC. Thanks for your effort and keep up great work. My particular cycle work sez 3/12-22/2013, so I would be surprised to see an afternoon rally to be followed by a bigger dive next week. Just have to wait and see.

Raj Time and Cycles said...

Thanks sailtoday,

The 2-3 weeks should be certainly interesting to watch

bob said...

I think the market has another try at a high before it breaks down

pb said...

Buy the dip. just buy the dip.

It's different this time.

This market will never go down!!

Raj Time and Cycles said...

Lol pb, but Timing is the Key!

bob said...

I think the market has one more try at a high but seem like it does not want to go done at all

Raj Time and Cycles said...

We'll see Bob, normally it makes some king of double Top, before heading lower, although there are exceptions

White Bear said...

Flash crash? Seriously? After the dismal NPF report last Fri and market closed down only measly down and given today's up-crash, you still think the government will allow a down market? A flash crash??? They won't even allow more than one day of correction and the correction has to be smaller than 50 DOW pts. Fight with the FED and you will be doomed!!!

Suren said...

Raj:

The market seems very resilient to going down. Is there a possibility that the FC cycle bleeds into May?

Raj Time and Cycles said...

Suren, and white Bear,

The markets are unfolding exactly as it should and are following the dominant Cycle1 I mentioned before:

"Even though there are good odds, it does not matter if a 7-12% Flash crash (FC) cycle occurs or not, what matters is that the dominant Cycle1 (http://timeandcycles.blogspot.com/2013/04/cycle-review-and-update.html) determines when exactly we should be long and then short if and when the FC does occur."

Fred said...

Still think we are on track for a big decline here...sentiment should be euphoric to the upside.

Raj Time and Cycles said...

Fred, yes, the cycles were looking for higher prices first, which we have seen, but may not be complete yet.

pb said...

I was just joking about that "buy the dip" comment but it is appearing to come true. This market does not want to drop.

sailtoday said...

pb, joking or not I kinda wished I had followed that suggestion. I still expect 4/16 to 4/24 to be the start of a nasty correction, but who really knows. I also thought that cash S&P 1576 would be tested but not broken ... so much for my thinking. I now kinda like 1600 to 1615 as the top. What do you think, Ian?

White Bear said...

Given today's rally, you can pretty much pack and clean up your "flash crash" prediction.

White Bear said...

Just curious. How does the dominant cycle theory tell you when this monster rally will end? Will it end here? Or will it go all the way up to S&P 1615? Thanks.

Raj Time and Cycles said...

Sailtoday, that looks about right.

Whitebear, the dominant cycle1 was looking for an 4/5L and a rally to new All time Highs and with more to come.

All I can say is Timing the upcoming High remains KEY to any 7-10% FC decline that will come and come it will.

Marketguy said...

seriously raj, why even put out the flash crash alert at the end of Feb then? it's been a month and a half of grinding up and then BOOM! yes, eventually the mkt will pull back 7-10% but didn't do any of us any good to say that 2 months ago when you are now saying the below:

Raj Time and Cycles said...

Whitebear, the dominant cycle1 was looking for an 4/5L and a rally to new All time Highs and with more to come.

All I can say is Timing the upcoming High remains KEY to any 7-10% FC decline that will come and come it will.

April 11, 2013 at 9:14 AM

Raj Time and Cycles said...

Marketguy,

I posted the FC, NOT for people to just blindly trade on it. As it is a Fixed cycle, that has a wide variance, it has always been and will always be within the context of the more precise dominant cycle1, which has further to go before it tops out.

After the dominant cycle1 says the Top is in, only then can I even entertain the idea of any sharp decline coming.

Marketguy said...

cmon raj, you said in big red bold letters at the end of Feb "when, in MARCH" then moved it to April and we are racing to new highs every day. Not once until we reached those highs (and especially back in Feb and early March) did you mention anything about it having to go along with the dominant cycle.

Raj Time and Cycles said...

Marketguy: "Not once until we reached those highs (and especially back in Feb and early March) did you mention anything about it having to go along with the dominant cycle."

That is because you are not a subscriber. All subscribers knew NOT to get prematurely short and to stay with the dominant cycle as all trends are still up. I suggests you reread the answer before this a few more times to get a better understanding, here it is again:


I posted the FC, NOT for people to just blindly trade on it. As it is a Fixed cycle, that has a wide variance, it has always been and will always be within the context of the more precise dominant cycle1, which has further to go before it tops out.

After the dominant cycle1 says the Top is in, only then can I even entertain the idea of any sharp decline coming.

One final advice, I suggest you do your own homework and don't trade on any public posts, that has only limited information. It is never a good idea. You get what you paid for.

This is my last post on this.

Good Luck to you.