Monday, November 1, 2010

Cycles - another's views

Here is a current article on cycles:

It differs from my analysis, but that is good in that it requires me to recheck my analysis.  Areas of disagreement are:
  • I do not view what he refers to as a 180 day wave (1 year cycle) as a dominate cycle
  • I believe his positioning of the 360 day wave (2 year cycle) is incorrect
  • His 4 year cycle leaves me wondering (the 4 year cycle is not dominant)
So here is his chart of the 4 year cycle with my comment:

Of course he could be right and I could be wrong - time will tell.  In his 180 day wave (1 year cycle) I believe his channels are overly generous and his projections high.  I have drawn in a tighter channel that I believe to be a better representation:

Here is my charts with annotations:

Note:  I have positioned the 2 year cycle differently.

You might ask why do I think the 1 year is not dominant?  Or the 4 year?  It is not just me that thinks that.  Check out this site:

Here is an excerpt of what he says:

"10-Yr, 41-Month & 24-Month CyclesAs discussed on pages 17-18 of the 2009 outlook, we cannot overlook the importance of the 10-year, 41-month and 24-month cycles when it comes to forecasting the general trend and direction of the stock market. The influence of these 3-cycles often predominates the entire trend when looking at 5-year sections of the market. There are of course other cyclic influences, but these 3 can never be ignored. The chart on the following page is very similar to the 100-year pattern shown (1909-1910) on the prior page and is also indicating a steadily declining market from Fall 2009 (Sept-Nov) into the season of Fall 2010 (Sept-Nov). Thus far, all indications are basically saying that the market is cyclically weak and both cycles and periodicity patterns indicate that the best buying opportunity for 2010 does not occur until very late in the season, most likely not until October or November.

Gann also stated that Bear markets often run 5 years down – the first move 2 years down (10/07 to 3/09), then 1 year up (2009), and 2 years down again (anticipating a Low in 2012), completing the 5-year downswing."

Now to wrap it up here is a projection based on the 24 month, 41 month (3.39 years) and 10 year cycles:


Now you have both views and can decide.

No comments:

Post a Comment