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"Who controls the past, controls the future"

21 April 2020 3:21 PM | (Administrator)

With the market down a second day in a row, and the absolute carnage in the crude oil market, we thought now would be a good time to re-visit some of the analogs to the current market that we've discussed in the Inner Circle.

Given the speed and depth of the latest crash, highest correlated analog was Black Friday and Black Monday of October 1987.  The conditions triggering the crash then were certainly different than those now, however the basic human emotions of fear and panic are the same.

Should this correlation with 1987, the retest of the bottom from March 23rd should occur on or around April 28th. 

Another highly correlated market was the winter of 1973 into early 1974.  Ironically that market crash also revolved around oil.  However in that case, OPEC proclaimed an oil embargo targeting western nations that pushed the price of oil up nearly 400%.

Again, we look at market analogs to give us an idea of what to expect in the future--however we don't trade on these signals.  For actual trading we use our proprietary trading model that we've backtested over the several market environments since 1996--from the exuberance of the era to the fear and panic following the September 11th attacks.  Our purpose is to provide an investment model that allows the greatest return while keeping risk to an absolute minimum. - The Leader in Quantitative Analytics
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