Secular Cycles in the U.S. Stock Market

Cycles in Stocks and Market Indices

Secular Cycles in the U.S. Stock Market

Postby RayTomes » 17 May 2011, 09:53

In the article http://www.financialsense.com/contribut ... ock-market they say that "We highlight three secular bear markets and a fourth that may be forming". I don't think there can be any doubt about it.
Image
Based on past secular cycles there is another approximately 5 years before the bear market is over.
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Re: Secular Cycles in the U.S. Stock Market

Postby RayTomes » 18 May 2011, 06:12

Of course a secular bear market being a long term down trend, it may contain many substantial rallies.
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Re: Secular Cycles in the U.S. Stock Market

Postby RayTomes » 02 Jun 2011, 05:08

donpaulo wrote:thank you for posting the data Ray, its refreshing to find useful info posted on this board and I look forward to posting here in the future.

I will add the following (my source is Jim Rogers)

the 20th Century saw 3 long commodity bull markets (which correspond well with the data presented by Greiss)

1906-23
1933-53
1968-82

The average length of duration is approx 17 years

Rogers claims the latest commodity bull run began in 1999, however I have seen others make slightly different claims

Ray can you or another member suggest the starting date of this commodity bull market ?

thanks


Hi donpaulo

Ideally this should go in commodities section not stocks.

The bull runs average 17 years as you say, but we also look at the cycle duration which is more like 30 years. According to Kondratieff there is a cycle of about 54 years in prices. However I find that many commodities show about a 27 year cycle that is half the Kondratieff, and sometimes a 17.5 year cycle that is one third of the Kondratieff cycle period.

The following graph is log of wholesale commodity prices from 1749 to 2010. The big runaway peaks in commodity prices are very evident. The latest run seems to have started after 2000 rather than before.

comm-pr.png
Commodity Prices
comm-pr.png (21.32 KiB) Viewed 15898 times


The spectrum of this data shows quite a few significant cycles. I have just shown the longer period ones here.

comm-spec.png
comm-spec.png (21.7 KiB) Viewed 15898 times


Picking the 28.7 year cycle and fitting it to the data gives this.

comm-pr-28.7-yr-cycle.png
comm-pr-28.7-yr-cycle.png (25.22 KiB) Viewed 15898 times


This shows the ideal timing and can be used to forecast ahead for a cycle or two.
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Re: Secular Cycles in the U.S. Stock Market

Postby RayTomes » 15 Jun 2011, 00:19

Hi Don Paulo

Your observation of the connection of wars to this cycle is very relevant. When looking at cycles in oil prices, as well as a cycle of around 5.54 years (half the 11.08 year Sunspot cycle period) it was found that huge surges in price occurred about every 30 years. These fitted the major wars that USA were involved in for the last century - WWI 1910s, WWII 1940s, Vietnam 1970s and Iraq/Afghanistan 2000s. Of course fighting very expensive wars debases the US currency and so commodity prices must rise in the debased currency.

For more, see http://www.cyclesresearchinstitute.org/ ... prices.pdf although I have followed the data further back in time since then.

Regards
Ray
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Re: Secular Cycles in the U.S. Stock Market

Postby RayTomes » 04 Jul 2011, 08:06

donpaulo wrote:... I was wondering if you could provide a reading list on stock and commodity cycles


I was surprised to discover that our links page has links to every subject except stocks: http://www.cyclesresearchinstitute.org/ ... cles.shtml

The software and books on cycles analysis might be useful: http://www.cyclesresearchinstitute.org/ ... ware.shtml

Many people consider the best book on stock cycles is J M Hurst's "The Profit Magic of Stock Transaction Timing".

Recently I read "Beating the Business Cycle" by Lakshman Achuthan and Anivran Banerji of ECRI (Economic Cycles Research Institute, no connection to CRI) and found this to be a useful book. They have made correct calls on business cycles earlier and more often than others. But business cycles are a bit different to stock cycles. Useful background anyway.

You can find a lot of books here, but I am not recommending anything in particular: http://www.cyclesresearchinstitute.org/ ... ooks.shtml
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