Monday, August 24, 2009

Puetz FinancialSense Interview...

The short cycles are beginning to align with the longer cycles (down) again. Significantly, the 86 day cycle that Puetz identified begins this week and we are in a Puetz Crash Window until about the middle of September.

While I’m not studied in Puetz, he uses some methodology that includes the cycles of the sun and planets and how they interact with nature. He uses these cycles and aligns them with changes in human psychology and thus market price. I DO NOT DISCOUNT HIS THEORIES. Everything has cycles! The fall is HARVEST TIME, and it is nearing.

The other side of the coin, of course, is that this is a very, very undeveloped science, one that still falls into the “squishy” category. DO NOT PLACE YOUR BETS in the Goldman CASINO based solely upon these methods! But do give it a listen and watch the cycles play out…

Here’s the link to the audio interview:

Click here for Puetz Interview...

Tickerforum member, Ponzi_unit, was graceful enough to provide a summary of Puetz’s interview. The interview sheds a lot of light on Armstrong’s work, it’s worth a listen…
From the interview: Puetz built upon previous research, 2.12 yr, 6 yr, 19 yr, Kondratieff 57 yr, 171 yr, 515 yr...

Puetz goes on to on to say that they were not estimated precisely to begin with and seems to have smoothed them out to be divisible by three. He says after he made very minor adjustments to the cycles and multiplied them by three he found they matched well with nature and calls them to be 'physical cycles'. Climate, geology and universe - all precisely divided by 3 - found about 25 cycles... and concludes that they are all linked.

Stock, business, climate,...

Cycles get out of phase but jump back, gravitational characteristics, electromagnetic cycles, human cycles (psyche) (which he discounts as he says they are caused by natural cycles?) hope I have that correct. Says it doesn't matter who's in charge, especially the 515 year civilization cycle rules over them (world leaders)... Nation after nation, no matter what part of world, civilizations seem to collapse... Similar to what I've read on Kondratieff, if humans can realize that these cycles exist we can control them -

On gov controlling cycles are proven failure, Puetz says we can't control by racking up huge debt during good times and says government is (in my words) counter cyclical. Should be encouraging saving during good times.

On EW, every cycle sub divides; Puetz used this concept in his theory. Frequency, and wave length theory confirm his cycles.

Believes a great number of people are influenced by negative / positive cycle and that there is nothing government can do to control it. Seems like a conflict with statement a couple paragraphs above.

Is there some way to predict stock market changes by monitoring mood changes?

Likes weekly survey "consumer comfort index" which contains a particular component 'personal finance index' ( no direct google hits on this ) tends to precede changes in Stock market by a few months. It relates to the question in the survey: 'how do you view your personal finances'

On short term news events - dominant factor, most nations are not prepared for big swings (in mood),

On 'turning points' A general rule: when one cycle peaks, all other cycles of smaller wave lengths peak at same time. Example, in Jan 2007, based on history of all these cycles, the 172 yr cycle (rounded) peaked, so the 2.12 yr, 6.36 yr, 19 yr & 57 yr also peaked. Subsequent to that, various market peaks stock, commodity peaked within 9 months...
- investors only respond positively to credit growth (reflation) during upswings (of cycles),...

Ties it in with climate cycles... global temp declines starting from Jan 2007 - ongoing influence.

On sunspots... thought it was ridiculous when he first heard it, doesn't believe it's absurd any more because of solar winds ionization of magnetic stream, at height (northern lights, etc.) says his theory predicts we are effected by Earths magnetic cycles, resulting mood swings, etc,...

Says cycles are more visible in bear markets than bulls markets. Says deleveraging during bears emphasizes cycles. Talks about a series of natural occurring waves effecting all living, (animate & inanimate) things. Unconscious behavior, not fully understood by science, yet recognized as likely influential on attitudes, moods,... many unknowns re precise mechanisms. (full moon madness!)

Not just theory of markets, theory of universe, cycles of BILLIONS of years which he's been able to trace back to the big bang. (Uhm, wow.)

(--- your humble scribe is now pausing for a moment of reflection on this, imagining the margin of error ---)

2.7 billion year cycle, volcanoes! evolution! extinction! 22.2 billion year cycle, 13.7 billion years

On Martin Armstrong: became aware of Armstrong 3 years ago (edit- pretty sure it's 3 months ago and i'm not going back to interview - there's that number 3 again!),

Says Armstrong breaks it down to core component as 2.15 and Puetz is 2.12 yrs, says they are only off by .03 (you better check for accuracy) and that Armstrong’s turning points match up well enough with his own... are nearly identical to what he's (Puetz) identified. The only difference between both of our theories is estimate on the time (huh?)... (I guess he means .03 yr)

On margin of error: within 2% likely within 1%, believes Armstrong has some errors, says Armstrong’s data fits the last 100 years better than his (Puetz own) cycles, but when looked at over longer period of time says his cycles fit better and that Armstrongs starts to break down. Says he thinks Armstrong tried to make it fit most recent data - it does it well. Thinks that Armstrong demonstrates 'inversion' well. Inversions do exist. Puetz describes them as deviations. Says Armstrong is correct (in some specific cases). So he's working on modification of his own theory for confirmation (using some Armstrong principles) -

Says we just had an 'inversion' (as Armstrong calls it) or 'deviation' as Puetz calls it happened in March of this year...

Inversion/Deviation = theory predicts peak however markets make a trough.

Says he has an explanation why this 'occasionally occurs' but won't go out on a limb to explain until he studies it further.

(Scribe notes: seems that Puetz has a lot of respect for Armstrong’s work, I'm curious to know if Puetz’s point of interest is in the concept that 'hot money' flow, evacuation from one peaking market flowing into another bottoming market (the next market to get hot) is the cause of these 'inversions/deviations')

Says he and Armstrong are seeing same thing, same conclusion, just different methodology.

172 yr cycle peaked Jan 2007, down for 30 years according to this theory. Last peak May 1835, (canal bubble) followed by 7 yr bear, followed by recession and civil war, down phase coincides with war cycles. International conflicts are greatest threat.

On the Fourth Turning (Strauss and Howe): Puetz acknowledges the work of many cycle theorists and says that everyone seems to come up with the same results and that what sets Puetz apart from others is that he believes he's documented the source of all the cycles in sequence. In other words, Puetz applies the physics behind the cycles.

Doesn't feel that all the cycles are converging, they are oscillating, are not precise, the larger cycles overwhelm smaller cycles...

(current application of cycle theory to markets - interview dated July 11, 2009)

Says that because of recent market deviation/inversion in March of 2009, that he expects the correction to now occur on a sub cycle of 28 day, 86 day cycles are in play now. Says 86 day cycle is now in phase w/258 day cycle. Expects some sideways action (must mean end of July-August according to timing of interview). Tremendous deleveraging taking place, oscillations are short term and doesn't believe in sustained upswing, 172 yr cycle rules. Says new next major low possible around April 2010, (6.36 yr cycle) again, all rebounds are capped. Down cycle should end around 2035. Deflationary/depression environment.

Actually worse for US because debt can't continue - says world is out of suckers buying US debt. Consumption drops till we can afford to pay as we go, sustainable.

Stocks and bonds look good compared to a few years ago but are over valued. Mentions rule of law breakdown as gov changes rules. Gold and silver can do favorable - although - major indexes there are breaking down too - gold and silver could deflate again. Long term, a good buy, but deflation can take them down short/medium turn. Would prefer to be in cash for conservative investors or short.

Robert Precture’s work, of Elliott Wave International, is also aligning with this timeframe…

Robert Precture - Robert Prechter of Elliott Wave on CNBC's Closing Bell, Aug 17, 2009: