THE 1929 & 1987 GREAT PANICS: MOON SUN PARALLELS

David McMinn

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Introduction
The 1929 & 1987 stock market panics were the most dramatic events in US financial history. In 1929, the Dow Jones Industrial Average (DJIA) declined by -12.83% on Black Monday (Oct 28) and -11.83% on Black Tuesday (Oct 29). In 1987, the DJIA plunged 508 points on Black Monday (Oct 19) or -22.61%, which represented the largest single-day percentage drop ever recorded by the index. There has been much academic research undertaken on these two spectacular panics. However, the remarkable Moon - Sun parallels between the two events have been overlooked in traditional economics. Carolan (1998) noted the cyclic similarities between the 1929, 1987 and 1997 October panics, concepts which will be discussed and expanded upon in the following text.

For Moon Sun data, the time assessed was 12 Noon US Eastern Standard Time on the relevant day, with no adjustment being made for daylight saving time. The daily closing value of the DJIA was used throughout the assessment. The angle between the Moon and Sun (lunar phase) was abbreviated to Ao – where 000 A° represented the new Moon; 90 A° the 1st quarter Moon; 180 A° the full Moon and 270 A° the 3rd quarter Moon. The abbreviation E° was adopted to denote the degree on the ecliptic circle, which was equivalent to the angle made to the spring equinox point (000 E°). The annual one day (AOD) rise or fall were defined as the biggest percentage one day DJIA movement in the year commencing March 1. They represented the most extreme one day shifts in investor sentiment during a given year. The post-crash low is taken as the major low after the panic.   

Moon - Sun Parallels
Intervals of precisely 717 synodic months appeared between the pre-crash spring lows, the record highs, the October highs, the black days and the AOD rises (Carolan, 1992, 1998, McMinn, 2006). Post-crash, the interval of 718 synodic months appeared for the 1929/1987 bear market lows, the 1930/1988 spring lows and the 1931/1989 AOD falls.

Table 1
THE 1929/1987 PANICS & LUNISOLAR PARALLELS

Key Dates

Interval

 

1929

1987

Syn Mths

DJIA Event

May 27, 1929

May 20, 1987

717.12

Spring Low

Sept 03, 1929

Aug 25, 1987

717.05

Record High

Oct 10, 1929

Oct 02, 1987

717.09

Autumn High

Oct 28, 1929

Oct 19, 1987

717.02

AOD Fall

Oct 30, 1929

Oct 21, 1987

717.02

AOD Rise

Nov 6, 1929

Oct 26, 1987

716.99

Major OD Fall

Nov 13, 1929

Dec 04, 1987

718.07

Post Crash Low

May 03, 1930

May 23, 1988

718.07

Spring Low

Sept 24, 1931

Oct 13, 1989

718.04

AOD Fall

Aug 12, 1932

Aug 6, 1990

717.15

AOD Fall

(a) Major one day falls were recorded after the black days: -9.92% on November 6, 1929 and -8.04% on October 26, 1987. These were among the 10 biggest one day falls ever recorded by the DJIA.
(b) In 1987, the DJIA low occurred on the day of the panic. However, the post-crash low happened on December 4, 1987.
Synodic Month (or Lunar Month) is the interval between successive new Moons and is equal to 29.5306 days.
Abbreviation: AOD – Annual one day. OD - One day.
Sources: Carolan (1992; 1998), McMinn (2006).

The Hong Kong stock market declined -11.1% on October 19, 1987 and was closed the following day in view of the Black Monday in the USA. The Hong Kong authorities, in their infinite wisdom, reopened the market on October 26 and the Hang Seng dropped -33.1%. From cycles, it was the worst possible day to reopen the market, given the trends in the 1929 crash and the major fall on November 6 (see Table 1).

One day (OD) percentage falls also aligned during the 1929 and 1987 panics. This was illustrated in Table 2, which was based on all OD falls => -3.00% between late September and December. The interval of separation was again 717.0 synodic months. Something similar could not be repeated for OD percentage rises over +3.00%, even though the AOD rises in 1929 (Oct 30) and 1987 (Oct 21) were separated by 717.0 synodic months.

Table 2
1929 & 1987 PARALLELS & ONE DAY % FALLS
All OD falls ≥ -3.00%

1929

% OD 
Fall

1987

% OD 
Fall

Interval
Syn Mths

Oct 03, 1929

-4.22

Sep 22, 1987

-3.02

716.99

Oct 16, 1929

-3.20

Oct 06, 1987

-3.47

717.02

Oct 23, 1929

-6.33

Oct 14, 1987

-3.81

717.05

Saturday (a)

 

Oct 16, 1987

-4.60

 

Sunday

 

Saturday

 

 

Oct 28, 1929

-12.83

Sunday

 

 

Oct 29, 1929

-11.73

Oct 19, 1987

-22.61

717.02

Nov 04, 1929

-5.79

Oct 22, 1987

-3.82

716.92

Nov 06, 1929

-9.92

Oct 26, 1987

-8.04

716.99

Nov 11, 1929

-6.82

 

 

 

Nov 12, 1929

-4.83

 

 

 

Nov 13, 1929

-5.27 PCL

 

 

 

 

 

Nov 09, 1987

-3.00

 

Nov 26, 1929

-3.37

 

 

 

 

 

Nov 30, 1987

-4.03

 

Dec 12, 1929

-5.92

Dec 03, 1987

-3.92

717.05

 

 

Dec 04, 1987

PCL

 

 

 

Dec 08, 1987

-3.10

 

(a) Half day trading.
Synodic Month (or Lunar Month) is the interval between successive new Moons and is equal to 29.5306 days.
Abbreviations: OD – One Day. PCL Post Crash Low.
Source: McMinn (2006).


For 1929 and 1987, there was lag of 55 days between the record high and panic, with another two days for the AOD rise (see Table 3).

Table 3
DJIA TRENDS IN 1929 & 1987

Record Peak

Interval
Days

AOD
Fall

Interval
Days

AOD Rise

Interval
Days

OD
Fall (a)

Sept 03, 1929

55

Oct 28, 1929

2

Oct 30, 1929

7

Nov 6, 1929

Aug 25, 1987

55

Oct 19, 1987

2

Oct 21, 1987

5

Oct 26
1987

(a) Major one day falls were recorded after the panics on Nov 6, 1929 (-9.92%) and Oct 26, 1987 (-8.04%). These were among the 10 biggest percentage DJIA one day falls ever recorded.

 
The interval between the 1929 & 1987 panics yielded lunisolar cycle intervals in integral numbers for the synodic month, the tropical month and tropical year (see Table 4). The nodical month and nodical year were a little out in terms of integral numbers (to within plus .09 and .11), while the apogee month was close to a half integral number. Such an alignment between major financial panics was a rare event.

Table 4
INTERVALS BETWEEN OCTOBER 28, 1929 & OCTOBER 19, 1987

Synodic
Month

Tropical
Month

Tropical
Year

Nodical
Month

Nodical
Year

Apogee
Month

717.02

774.99

57.97  

778.11

61.09  

768.44

Synodic Month (or Lunar Month) is the interval between successive new Moons and is equal to 29.5306 days.
Tropical Year (or Solar Year) is the time taken for the Sun to complete one cycle of the ecliptic from spring equinox to spring equinox and is equal to 365.2422 days.
Tropical Month is the time taken for the Moon to complete one cycle of the ecliptic from spring equinox to spring equinox and is equal to 27.3216 days.
Nodical Month (or Draconic Month) is the time taken for the Moon to complete one cycle from ascending node to ascending node and is equal to 27.2122 days.
Nodical Year (or Eclipse Year) is the time taken for the Sun to complete one cycle from ascending node to ascending node and is equal to 346.6201 days.
Apogee Month (or Anomalistic Month) is the time taken for the Moon to complete one cycle from apogee to apogee and is equal to 27.5546 days.


Blue Monday 1997   

October 27, 1997 saw a dramatic drop in the DJIA with the market being closed twice on the day. Overall, the decline was -7.13%, which would have been far worse without such market intervention. For the 1929, 1987 and 1997 panics, the synodic month intervals occurred in close integral numbers. This applied to the peaks, AOD falls and AOD rises (see Table 5).

Table 5
INTERAVALS BETWEEN THE 1929, 1987 & 1997 OCTOBER PANICS

Key Dates

Interval
Syn Mths

Key Dates

DJIA Event

Sept 03, 1929

840.11

Aug 06, 1997

Record High

Oct 29, 1929

840.99

Oct 27, 1997

AOD Fall

Oct 30, 1929

840.99

Oct 28, 1997

AOD Rise

 

 

 

 

Key Dates

Interval
SynMths

Key Dates

DJIA Event

Aug 25, 1987

123.06

Aug 06, 1997

Record High

Oct 19, 1987

123.97

Oct 27, 1997

AOD Fall

Oct 21, 1987

123.97

Oct 28, 1997

AOD Rise

Synodic Month (or Lunar Month) is the interval between successive new Moons and is equal to 29.5306 days.


The 1929 & 1987 October black days took place two tropical months after the record peak, while the comparable interval for the 1997 event was exactly three tropical months (see Table 6).  The 1929 & 1997 post-crash lows happened 0.5 synodic months after the panic day, whereas the comparable interval for 1987 1.5 synodic months.

Table 6
INTERVALS FOR THE 1929, 1987 & 1997 PANICS

Record Peak

Interval

Black Day

Trop Mths

Sep 03, 1929

55 days

Oct 28, 1929

2.01

Aug 25, 1987

55 days

Oct 19, 1987

2.01

Aug 06, 1997

82 days

Oct 27, 1997

3.00

 

 

 

 

Black Day

Interval

Post-Crash Low

Syn Mths

Oct 28, 1929

16 days

Nov 13, 1929

0.54

Oct 19, 1987

46 days

Dec 04, 1987

1.56

Oct 27, 1997

16 days

Nov 12, 1997

0.54

(a) The DJIA low occurred on the day of the panic. However, the post-crash lows happened on Dec 4, 1987 and Nov 12, 1997.
Synodic Month (or Lunar Month) is the interval between successive new Moons and is equal to 29.5306 days.
Tropical Month is the time taken for the Moon to complete one cycle of the ecliptic from spring equinox to spring equinox and is equal to 27.3216 days.


Lunar Phase
 
Record DJIA peaks before the 1929, 1987 and 1997 crashes took place around a new Moon (00 - 40 A°) with the Moon and Sun in similar ecliptic positions (see Table 7). The AOD falls happened a few days before a full Moon (310 - 325 A°). In financial history, there are two types of October panics – those happening around a full Moon and those occurring a few days before a new Moon (see Appendix 1).
  
          

Table 7
LUNAR PHASE & THE 1929, 1987 & 1997 PANICS

 

Sun E°

Moon E°

Phase A°

Record DJIA Highs – Lunar Phase Range 00 - 40 A°

Sep 03, 1929

161

164

003

Aug 25, 1987

152

165

013

Aug 06, 1997

134

171

037

October DJIA Highs – Lunar Phase Range 85 - 120 A°

Oct 10, 1929

197

286

089

Oct 02, 1987

189

309

120

Oct 07, 1997

194

262

068

DJIA AOD Falls – Lunar Phase Range 310 - 325 A°

Oct 28, 1929

216

182

313

Oct 19, 1987

206

170

324

Oct 27, 1997

214

174

320

DJIA AOD Rises – Lunar Phase Range 330 - 350 A°

Oct 30, 1929

217

195

338

Oct 21, 1987

208

195

347

Oct 28, 1997

215

185

330

Source: McMinn, 2006.


2-8/60 Year Grid      
Between 1910 and 2000, 6 major DJIA October AOD falls (≥ -3.60%) happened in 1927, 1929, 1937, 1987, 1989 & 1997. They yielded a precise grid based on 2-8/60 solar years (see Table 8), with lunar phase in narrow ranges 150 – 165 Ao (before a full Moon) and 310 – 330 Ao (before a new Moon). These AOD October falls were followed a few days later by an AOD rise, with one anomaly in 1927 (Sep 6 prior to the AOD fall). (NB The term 2-8/60 year grid is derived from the 2-8 year intervals on the horizontal and 60 years on the vertical in Table 8.)

The 2-8/60 year grid may be extended on the right hand side by adding 11 years. This gave the 2008 AOD fall (Oct 15, -7.75%) during Black October. Subtracting 60 years from this date gave the 1948 AOD fall (Nov 3, -3.85%), when Truman’s surprise victory in the presidential election sparked stock market tremors.

Table 8
OCTOBER AOD FALLS & THE 2-8/60 YEAR GRID
Solar Year Intervals & Lunar Phase

1927
Oct 08
-3.65%
150 Ao

+ 2 yrs

1929
Oct 28
-11.73%
326 Ao

+ 8 yrs

1937
Oct 18
-7.75%
164 Ao

+ 60 yrs

 

+ 60 yrs

 

+ 60 yrs

1987
Oct 19
-22.61%
324 Ao

+ 2 yrs

1989
Oct 13
-6.91%
164 Ao

+ 8 yrs

1997
Oct 27
-7.18%
320 Ao

Source: McMinn, 2010.


Discussion and Conclusions
Lunisolar tidal effects are hypothesised to influence human physiological cycles, which in turn determined the prevailing mass mood and thus market outcomes. Periods of optimism lead to rising markets, while periods of pessimism result in declining indexes and depressed markets. The crisis occurred when there is a sudden shift in sentiment from greed to fear. The collective mood is viewed as fluctuating through cycles of optimism - crisis - fear, in harmony with lunisolar cycles. A connection between Moon Sun effects, physiological cycles and market outcomes can be supported by various studies. Hormone levels of animals and humans have been shown to fluctuate over the synodic month (Endres & Schaad, 2002; Zimecki, 2006), while studies have linked hormone levels to market trading success (Chen & Ozdenoren, 2005; Coates & Hebert, 2008; Coates et al, 2009).

The Moon – Sun parallels between the 1929 and 1987 great panics were remarkable and it seems strange that such similarities have been ignored in mainstream academia. The difficulty arises to explain how these parallels arise and why the importance of 717 and 718 synodic months between the key market turning points in 1929 and 1987. Moon Sun effects are strongly evident in financial patterns, which is hypothesized to account for the mathematical structuring found in trading activity. How the Moon Sun tidal harmonics actually functioned is completely unknown. Solving the mystery will require major advances in cycle theory, something that is unlikely to happen any time soon.       


References

Carolan, Christopher. 1992. The Spiral Calendar. New Classics Library. 252p.
Carolan, Christopher. 1998. Autumn Panics. The Market Technician. Journal of the Society of Technical Analysts. p 12-16. July.
Chen, Y, Katusccak, P & Ozdenoren, E. 2005. Why Can’t A Woman Bid More Like A Man? Working paper. Sep 3.
Coates, J M & Herbert, J. 2008. Endogenous Steroids and Financial Risk On A London Trading Floor. Proceedings of the National Academy of Sciences. Apr 22; 105 (16): 6167-72.
Coates, J M., Gurnell, M & Rustichini, A. 2009. Second-to-Fourth Digit Ratio Predicts Success Among High frequency Financial Traders. Proceedings of the National Academy of Sciences. Jan 13; 106: 347-348.
Dichev, Ilia & James, Troy. 2001. Lunar Cycle Effects In Stock Returns. Working paper. August. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=281665
Endres, Klaus-Peter & Schaad, Wolfgang. 2002. Moon Rhythms in Nature. How Lunar Cycles Affect Living Organisms. Floris Books.
Kindleberger, Charles P. 1996. Manias, Panics & Crashes. John Wiley & Sons.
McMinn, David. 2000. Lunar Phase & US Crises. The Australian Technical Analysts Association Journal. p 20-31. Jan/Feb.
McMinn, David. 2006. Market Timing By The Moon & The Sun. Twin Palms Publishing. 183p.
McMinn, David. 2010. 60 Year Intervals & October Panics. Market Technician. Journal of the Society of Technical Analysts. Issue 66. p 13-15. June.

 

Appendix 1   OCTOBER PANICS AND LUNAR PHASE

Since 1896, there have been 8 DJIA AOD falls (=> -3.60%) occurring in October.    There were additional October panics in 1847, 1857 and 1907 listed by Kindleberger (Appendix B, 1996), as well as the New York panic caused by the 1871 Chicago fire. The listings gave 13 October panics, all of which had lunar phase between:
*    150 & 205 Ao, 1847, 1897, 1907, 1927, 1937, 1989, 2008. Around a full Moon.
*    300 & 350 Ao, 1857, 1871, 1903, 1929, 1987, 1997. Before a new Moon.

The Moon’s ecliptical position was also always near the 180 Eo autumn equinox point (range: 135 – 195 Eo) or the 000 Eo spring equinox point (range: 340 – 045 Eo). In the month of October, the Sun is always sited between about 190 and 220 Eo.
           

Table A, Appendix 1
OCTOBER PANICS AND LUNAR PHASE

DJIA AOD Fall
≥ -3.60%

%
Fall

Sun
Eo

Moon
Eo

Phase
Ao

Oct 12, 1897 (a)

-3.95

200

042

202

Oct 19, 1903 (a)

-4.17

205

193

348

Oct 08, 1927

-3.65

194

344

150

Oct 28, 1929

-12.83

215

182

326

Oct 18, 1937

-7.75

205

009

164

Oct 19, 1987

-22.61

206

170

324

Oct 13, 1989

-6.91

200

004

164

Oct 27, 1997

-7.18

214

174

320

Oct 15, 2008

-7.85

202

034

192

October Panic

Event

Sun
Eo

Moon
Eo

Phase
Ao

Oct 23, 1847

UK panic

210

023

173

Oct 14, 1857

US & UK panics

201

165

324

Oct 22, 1907

US panic

208

044

196

Oct 09, 1871

Chicago fire panic

195

139

303

(a) Two almost equal AOD falls took place in 1897 and 1903. However, the DJIA AOD declines on September 21, 1897 (-3.90%) and August 19, 1903 (-4.07%) were omitted because only October events were considered.