Saturday, October 27, 2012

Economic cycles III

We have covered 2 of the 3 economic cycles we identified as important within the economy.  We covered the Kitchin (inventory) cycle and  Jugular (investment) cycle.  This leaves the third cycle:

The three most important cycles are:
  1. ...
  2. ...
  3. the 15-18 year Kuznets cycle in housing construction / prices and associated consumer spending.
The third cycle really encompasses all construction and infracstructure building.  We see faint signs that housing is trying  to bottom.  Construction/housing topped in 2006.  Half of 15 is 7.5 and 2006 + 7.5 is mid 2013 (half of 18 is 9 - 2006 + 9 is 2015).  Given this - construction/housing is 1.5 or more years to a true bottom.

The last time all three of these cycles were bottoming in close proximity was in the 1970s.  So one might suspect that 2008-2018 will be similiar to the 1970s.  Of course, there will be differences - longer cycles like the K-Wave are at different time frames than in the 1970s. 

We included the Kuznet cycle in our last post - so review that for a visual.  Here though is how this fits within the longer K-Cycle:

Note: the Kuznet cycles nest within (4 cycles) the K-cycle.

Next week should be a temporary swing trade bottom.  The 35TD and 22TD cycles should bottom by the end of the week.  I have placed limit orders to sell 1/2 of my "inverse" insurance (RWM) around $26.50. 

Here is a visual of RWM:
GL traders.....  Vote and vote often.  ;)



    I hope you pleasing. Greetings from Italy

  2. Inlet, glad to hear you are making huge progress, keep up the good work. Cycles, will be interesting to see if election yr cycle holds thru yr end. hope so. hehehe

  3. been trying to reply for several weeks, finally figured out the problem, shhhhhsh, plus a virus didn't help. lol

  4. AAPLitis should purge the worm and juice it yr end. all aboard, turn the tech mess around for a bit. did it last yr!!!!

  5. Sue, nice to hear from you. I feel good, had a rough "go" March-July, but am walking 2 miles every morning. Heck of a way to diet (lost 25 pounds), and I don't reccomend the triple bypass diet. Hehehe

    Expecting a bit of a rally into mid Nov as the lunar (22TD cycle) should have just completed. Not sure what impact 2 days closed will do to the shorter cycles, but we have a solar eclipse mid month which may mark another market turn. So best guess right now is a bit of a rally into mid month, then we will see.