Summary:
- The Wall cycle (20 weeks) should be down
- The 1 year cycle should be down
- The Kitchin cycle (41 months) should be down
Here is a chart looking at the near future (next month or so):
Minggu, 27 Februari 2011
The month ahead (March) 2-28
I have provided you a comprehensive long term outlook. Of course this gives you the expected overall environment over the next couple of years, but does nothing when it comes to shorter time frames for swing cycle trading. So Here is the outlook for the coming month.
Summary:
Here is a chart looking at the near future (next month or so):
GL traders. Do your own analysis. Use stops to preserve your gains.
Summary:
Here is a chart looking at the near future (next month or so):
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:
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.
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
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):
Sabtu, 26 Februari 2011
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.
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.
Kamis, 24 Februari 2011
Comments and outlook 2-25
I mentioned yesterday we should not be surprised if we get an up day today or tomorrow. I guess I failed to mentioned we could get a mixed day (some indices up, some down) - which is what we saw today. I guess you could say I was half right.
So we had the 7+ day cycle bottom and turn up (see yesterday's chart). Tomorrow we should see the 11 day cycle top and turn down (again - see yesterday's chart). So these two cycles should be a push (offset each other).
It still appears that the longer cycles are providing some downward momentum. So how does this play out with the 5 day, 4 day and 1 day cycles. The 5 day cycle is up, the 4 day cycle is down - so another push (offsetting cycles). The 1 day cycle tops around 10:30-11:00 am and is down until around 2:00 pm. So maybe a little upward movement early and weakness during the middle of the session and some recovery into the close.
The day overall should have a down bias from the longer cycles and IMO close red. For your viewing pleasure:
GL traders, do your own analysis and use extreme caution in buying dips.
So we had the 7+ day cycle bottom and turn up (see yesterday's chart). Tomorrow we should see the 11 day cycle top and turn down (again - see yesterday's chart). So these two cycles should be a push (offset each other).
It still appears that the longer cycles are providing some downward momentum. So how does this play out with the 5 day, 4 day and 1 day cycles. The 5 day cycle is up, the 4 day cycle is down - so another push (offsetting cycles). The 1 day cycle tops around 10:30-11:00 am and is down until around 2:00 pm. So maybe a little upward movement early and weakness during the middle of the session and some recovery into the close.
The day overall should have a down bias from the longer cycles and IMO close red. For your viewing pleasure:
Rabu, 23 Februari 2011
comments amd outlook for 2-24
If you follow my posts regularly you know I turned bearish about 2 weeks ago. Now I was early, but I wanted to be sure I provided ample time for people to make adjustments (tighten stops, trim positions). We got some follow through today on yesterday's substantial sell off. So this is developing the feel of something more than a 1-2 day correction. Time will tell. What we can be sure of is the market supporters (IE the Bernank) won't give up without a fight. So this is apt to be 2-3 days down and 1 day up over the next 4-8 weeks. It may be totally frustrating at times. But, recognize it for what it is and don't be too quick to buy dips and when you buy look at areas that can benefit (IE energy related ETFS) from the environment.
Tonite I will not focus on the very short cycles as they lack the amplitude to overcome the general trend IMO. But we will look at the short cycles. We have one bottoming and one that will top and turn down (probably Friday). Here is a chart:
Gl traders. IMO the bias is now down, but we should not be surprised if tomorrow or Friday is up. Do your own analysis please.
Tonite I will not focus on the very short cycles as they lack the amplitude to overcome the general trend IMO. But we will look at the short cycles. We have one bottoming and one that will top and turn down (probably Friday). Here is a chart:
Gl traders. IMO the bias is now down, but we should not be surprised if tomorrow or Friday is up. Do your own analysis please.
Selasa, 22 Februari 2011
comments and 02-23 outlook
Given the extent of the selling today something of a bounce tomorrow would not be surprising. There are indicators (IE TRIN) that suggest we are not oversold yet though. If we have an actual change in trend though you probably want to exercise extreme care betting against the trend (going long).
The short cycles may show up, but if as I expect the longer cycles have kicked in to the downside then any effect will be fleeting. And the short cycles do suggest the possibility of a bounce tomorrow. See for yourself:
Gl traders. Tread carefully and do your own analysis.
The short cycles may show up, but if as I expect the longer cycles have kicked in to the downside then any effect will be fleeting. And the short cycles do suggest the possibility of a bounce tomorrow. See for yourself:
Cycles or Elliott Waves?
It is not an either/or question. Elliott Waves can be explained in terms of cycles. Cycles is the basis for Elliott Waves. Source: http://www.financialsensearchive.com/editorials/bronson/Model.pdf If you are a student cycles read the article - loads of information....
Borrowed from this source:
Knowledge is power.
Borrowed from this source:
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