Sunday, February 27, 2011

The long cycles

I mentioned the Juglar cycle in my last post.  It is supposedly 7-11 years.  I find that much variance to be too large to be helpful, so I am not including it.  As an economic cycle I will (for the time being) assume the 10 year cycle is the resulting cycle in the stock market.

The 10 year cycle may actually be 10-10.5 years (120-126 months).  My reasoning is that it is 3 Kitchin cycles in length.   Most people refer to the Kitchin Cycle as 41 or 42 months.  One authority claims it is 40.68 months. that is about  122 months or 10 years and 2 months. If the Kitchin cycle  is 42 months then 3 cycles is 10 years 6 months (126 months or 10.5 years).

Each Kitchin cycle is composed of 9 Wall cycles of 20 weeks.  An average month is 30.42 days (365 / 12).  So a Kitchin cycle is  1237. 5 days (40.68 X 30.42) to  1277.6 days (42 X  30.42).  A Wall cycle is 140 days (20 X 7). That means 9 wall cycles is  1260 days.  We have 1237.5 days (Kitchin cycle of 40.68 months), 1260 days (9 Wall cycles), 1277.6 days (Kitchin cycle of 42 months). 

So lets go with 41 months for the length of a Kitchin cycle (1247 days).  If there is 3 Kitchin cycles in our 10+ year cycle that is 3744 days (3 X 1247 + 2 leap days).  Since 10 years is 120 months which is   3652.4 days (120 x 30.42 + 2 leap days).  That  is 92 days (3 months) less than 3744 days.  So that makes the 10+ year cycle 10 years and 3 months long. 

Let's review: 
  • The Wall cycle is 20 weeks. There are 9 Wall cycles in Kitchin cycle.
  • The Kitchin cycle is 41 months long.  There are 3 Kitchin cycles in the 10+ year cycle.  This 10+ year cycle may be the Juglar cycle?
  • The 10+ year cycle is 10 years and 3 months long.
  • Three 10+ year cycles  30.75 years or equal a Supercycle.
  • Six 10+ year cycles is 61.5 years or a KWave
Note:  A Supercycle is 2 Kuznets cycles  in length - so a Kuznets cycle is about 15.37 years (or 1.5 time the 10+ year cycle.)

We see from this each cycle is a multiple of a shorter cycle.  With this in mind  I redid the chart for the very long cycles and updated my prior post.   Here is my latest attempt to chart the 10+ year, Kitchin and and Wall cycles (as they fit into the context of the longer cycles):

Traders enjoy.  Please do your own analysis.  Later we may look at even shorter cycles and see if they are factors of the Wall cycle.

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