What the cycle analysts are saying - part 3

Tonight we look at cycle analyst David Knox Barker.
　
http://www.safehaven.com/article/19583/global-stock-market-cycle-forecast-2011

Mr. Barker probably goes in to more detail about his analysis that the other analysts I have covered. He claims cycles can vary based on certain Fibonacci ratios (an illustrates this in his writings). One of the more interesting analysts I think. He also claims that government intervention extended the long wave (K-wave) cycle into 2012 - and it should have actually bottomed in 2009. He believes the current K-wave started in 1949 (or early 1950) and would have ended in 2009 or early 2010 (60 years) except for government intervention. A K-Wave is and made up of 2 Super cycles (same as Drokes).

He focuses on the Kitchin Cycle (he set it at 42 months - others use 41 months and 40.68 months (3.39 years) and some call it the Dewey cycle. He says there are 16 Kitchin cycles within a K-wave (8 within a Super cycle). The other cycle he focuses on is the 20 week cycle which he calls the Wall cycle (after PQ Wall explained the relationship between the 20 week cycle and the Kitchin cycle). There is 3 sets of 3 Wall cycles within each Kitchin Cycle. The rule of third last and weakest makes the third Wall cycle decline harder than the other two in the three sets and tends to show up clearly on a chart, which was what occurred on July 1, 2010

Let' summarize:

• K-Wave (1949-2012)
• Super cycle (1949-1981, 1981-2012 avg 31.5 years)
• Kitchin cycle 42 Months (Mar 09 - Sep 12)
• Wall cycle 20 weeks (pivot date July 1, 2010)

Here are the longer cycles:

And the Kitchin and wall cycles:

GL traders.  I hope you appreciate the similarities and differences of the analysts.  Next you will see how one analyst believes there are 3 Kitchin cycles in a 10 year cycle...    So be sure to read about the next analyst.

The really long cycles

The K-Wave (half a Kondratiev cycle)
The Russian economist Nikolai Kondratiev (also written Kondratieff) was the first to bring these observations to international attention in his book The Major Economic Cycles (1925) alongside other works written in the same decade. Two Dutch economists, Jacob van Gelderen and Samuel de Wolff, had previously argued for the existence of 50 to 60 year cycles in 1913. However, the work of de Wolff and van Gelderen has only recently been translated from Dutch to reach a wider audience.

More recently, some argue that government intervention into the economy to try and control economic cycles has lengthened the cycle to around 64 years. Most refer to this as a K-Wave.

The Super cycle
Others such as Elliott have speculated there are longer cycles (Grand Supercycle). Also, supposedly within a Grand Supercycle there are shorter (yet long) cycles known as Supercycles. How does a Supercycle fit within the context of a K-Wave? Well, some claim within a K-Wave there are two Supercycles (each half the length of a K-Wave).


And then there is Kuznets
Simon Kuznets (Nobel Prize winner) studied demographics and from his studies found cyclic trends. Kuznets swing is a claimed medium-range economic wave with a period of 15-25 years found in 1930 by Simon Kuznets.[1] Kuznets connected these waves with demographic processes, in particular with immigrant inflows/outflows and the changes in construction intensity that they caused, that is why he denoted them as "demographic" or "building" cycles/swings. Kuznets swings have been also interpreted as infrastructural investment cycles.

So a Kuznets cycle is half a Supercycle. So a K-wave is 2 Supercycles or 4 Kuznets cycles...

The Fork in the road

We have talked about the Kitchin cycles and Wall cycles in the past. But a gentleman last name Juglar claims there is a 8-11 year cycle and like stars they named it after him (the Juglar cycle). Many have related this to the Kuznet Cycle (half a Kuznets cycle) and the Kitchin Cycle (2 Kitchin cycles). This implies 8 Juglar cycle within a K-wave and 16 Kitchin cycles in a K-Wave.

If a K-Wave is 64 years that is 768 months. A Kitchin cycle is 42 months +/-. We did the math and find a 64 year K_Wave is 18 Kitchin cycles.... So we are not happy with the Kitchin/Juglar relationship.

We have told you about the 10 year cycle (and how it is approximately 3 Kitchin cycles). We do the math and a K-Wave is 6.4 ten year cycles (or 6 x 10.57 years). Three Kitchin Cycles of 42 months (3.5 years) is 10.5 years.  I believe this relationship works better than the Juglar/Kitchin relationship.

There is some dispute as to whether there are 16 or 18 Kitchin cycles within a K-Wave. I tend to believe there are 18 (6 X 10+ year cycles or 3 X 6 Kitchin cycles).

And as always here is a visual (K_wave, Supercycle, Kuznets  - updated 02-27):

Enjoy the big picture. 

Later we will try to tie in the shorter cycles we discussed.