Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
What Fake UK Unemployment Statistics Predict for General Election Result 2019 - 6th Dec 19
What UK CPI, RPI and REAL INFLATION Predict for General Election Result 2019 - 5th Dec 19
Supply Crunch Coming as Silver Miners Scale Back - 5th Dec 19
Gold Will Not Surpass Its 1980 Peak - 5th Dec 19
UK House Prices Most Accurate Predictor of UK General Elections - 2019 - 5th Dec 19
7 Year Cycles Can Be Powerful And Gold Just Started One - 5th Dec 19
Lib Dems Winning Election Leaflets War Against Labour - Sheffield Hallam 2019 - 5th Dec 19
Do you like to venture out? Test yourself and see what we propose for you - 5th Dec 19
Great Ways To Make Money Over Time - 5th Dec 19
Calculating Your Personal Cost If Stock, Bond and House Prices Return To Average - 4th Dec 19
Will Labour Government Plant More Tree's than Council's Like Sheffield Fell? - 4th Dec 19
What the UK Economy GDP Growth Rate Predicts for General Election 2019 - 4th Dec 19
Gold, Silver and Stock Market Big Picture: Seat Belts Tightened - 4th Dec 19
Online Presence: What You Need to Know About What Others Know About You - 4th Dec 19
New Company Tip: How To Turn Prospects into Customers with CRM Tech - 4th Dec 19
About To Relive The 2007 US Housing Market Real Estate Crash Again? - 3rd Dec 19
How Far Will Gold Reach Before the Upcoming Reversal? - 3rd Dec 19
Is The Current Stock Market Rally A True Valuation Rally or Euphoria? - 3rd Dec 19
Why Shale Oil Not Viable at $45WTI Anymore, OPEC Can Dictate Price Again - 3rd Dec 19
Lib Dem Election Dodgy Leaflets - Sheffield Hallam Battle General Election 2019 - 3rd Dec 19
Land Rover Discovery Sport Brake Pads Uneven Wear Dash Warning Message at 2mm Mark - 3rd Dec 19
The Rise and Evolution of Bitcoin - 3rd Dec 19
Virtual games and sport, which has one related to the other - 3rd Dec 19
The Narrative About Gold is Changing Again - 2nd Dec 19
Stock Market Liquidity & Volume Diminish – What Next? - 2nd Dec 19
A Complete Guide To Finding The Best CFD Broker - 2nd Dec 19
See You On The Dark Side Of The Moon - 2nd Dec 19
Will Lib Dems Win Sheffield Hallam From Labour? General Election 2019 - 2nd Dec 19
Stock Market Where Are We?  - 1st Dec 19
Will Labour's Insane Manifesto Spending Plans Bankrupt Britain? - 1st Dec 19
Labour vs Tory Manifesto Debt Fuelled Voter Bribes Impact on UK General Election - 30th Nov 19
Growing Inequality Unrest Threatens Mining Industry - 30th Nov 19
Conspiracy Theories Are Killing This Nation - 30th Nov 19
How to Clip a Budgies / Parakeets Wings, Cut / Trim Bird's Flight Feathers - 30th Nov 19
Hidden Failure of SIFI Banks - 29th Nov 19
Use the “Ferrari Pattern” to Predictably Make 431% with IPOs - 29th Nov 19
Tax-Loss Selling Drives Down Gold and Silver Junior Stock Prices - 29th Nov 19
We Are on the Brink of the Second Great Depression - 29th Nov 19
How to Spot REAL Amazon Black Friday Bargains and Avoid FAKE Sales - 29th Nov 19
Central Banks’ Gold Buying and Repatriation Spree - 28th Nov 19
Another Precious Metals’ Reversal Coming Right Up! - 28th Nov 19
Stock Market 100% Measured Moves May Signal A Top - 28th Nov 19
Don’t Look for Investing Advice in the Media - 28th Nov 19
Why You Should Buy Trailer Park Stocks - 28th Nov 19
Will YouGov General Election Forecast 2019 be as Wrong as their REAL Forecast was for 2017? - 28th Nov 19

Market Oracle FREE Newsletter

UK House prices predicting general election result

Cycles Have a History, You Should Read About It

Stock-Markets / Cycles Analysis Aug 29, 2014 - 03:21 PM GMT

By: Harry_Dent

Stock-Markets

Last year, I was reading a sidebar in Barron’s where ex-fund manager and PIMCO director Paul McCulley was talking about a stock market peak later that year… at the same time sunspot cycles were forecast to peak.

This wasn’t the first time I’d heard respected analysts connect market activity to sunspot activity. Charles Nenner, a prominent cycle analyst believes there’s a plausible connection. So does Richard Mogey, founder of the Foundation for the Study of Cycles (and a speaker at our October IES Conference in Miami).


With McCulley joining the growing ranks of believers, it got me thinking… is there something to this theory? Do sunspot cycles affect the stock markets in any way? (Crazy, I know… but first, I’m no stranger to being called crazy and second, success isn’t found inside the box.)

As you know, NASA tracks and projects sunspot activity — that makes it more projectable. It’s discovered that movement on the sun’s surface ebbs and flows in cycles (just like everything else in life). As the cycle unfolds, the earth is bombarded by more or less solar radiation. The high cycles can knock out satellites and communication systems. They also raise temperatures and rainfall. (I explain this concept more in detail in my latest book, The Demographic Cliff — read a preview on sunspot cycles and activity from Google books.)

Of course, rising and falling energy cycles certainly could have some impact on human behavior…

What was more interesting to me though was that this sunspot cycle is reputed to peak every 11 years — that’s why I first rejected it as I saw no correlations on 11-year cycles. So I went back and documented the peaks back over a hundred years only to discover that the real average is 10.3 years.

That’s when I got really interested.

You see, there’s another cycle we follow closely, one first documented by Ned Davis. It actually has been one of the critical cycles in our research for decades. It’s called the Decennial Cycle and it tends to peak around the end of each decade and bottom in the second year of the next decade. And in the last cycle, there was a peak in early 2000 and a bottom in late 2002, right on cue.

The cycle then remains sideways to moderately up for stocks until the middle of the decade (i.e. late 2004 or late 2014), and then rises the most sharply again into the end of the decade.

Whether such cycles bottom earlier or later in the first few years of every decade has been related to when the four-year presidential cycle bottoms. That’s why we had major bottoms in 1962, 1970, 1982, 1990 and 2002.

These two cycles together — the 10-year Decennial Cycle and the four-year Presidential Cycle — created our best intermediate patterns for decades. The last time these two cycles should have bottomed together was late 2010 and a major crash and recession would have been expected more broadly between 2010 and 2012. But that didn’t happen…

When the economy weakened in 2010 to near zero growth, the Fed stepped in with QE2. It did it again in mid- to late 2012 forward with two phases of QE3. All of which, I assumed at first, threw the otherwise reliable cycles out of kilter.

Or is there another explanation…?

As I said before, the average sunspot cycle is 10 years. The last top was in early 2000… right at the top of the tech stock bubble. But that sunspot cycle bottomed years later than normal, and would you believe it?! The recent stock market crash bottomed in early 2009… at exactly the same time the sunspot cycle bottomed.

NASA predicted a later than usual sunspot cycle to peak around mid-to-late 2013. And would you believe it?! That’s when our analysis of stock patterns suggested back then that we could see a top in the markets. We thought the Decennial Cycle failed for the first time in 50 years, but if sunspots are the cause, we just got an eccentric cycle that pointed down from late 2013 into late 2019, when our Spending Wave and Geopolitical Cycles also pointed down at the same time.

Subsequently, months of research into this sunspot cycle has shown that 88% of the major crashes, recessions, depressions and financial crises came in the down cycle, and most of the rest came close on either side. This is clearly no coincidence!

But most important, this cycle peaked a little later than the scientists forecast, in February 2014.

Bottom line: this cycle, the most powerful I have discovered since the Spending Wave, looks like it peaked this past February and points down into around late 2019 or early 2020. The worst crashes come in the first 2.5 years after a peak just as Ned Davis’ Decennial Cycle suggested — so the greatest should be coming between late 2014 and late 2016.

Harry

http://economyandmarkets.com

Follow me on Twitter @HarryDentjr

Harry studied economics in college in the ’70s, but found it vague and inconclusive. He became so disillusioned by the state of the profession that he turned his back on it. Instead, he threw himself into the burgeoning New Science of Finance, which married economic research and market research and encompassed identifying and studying demographic trends, business cycles, consumers’ purchasing power and many, many other trends that empowered him to forecast economic and market changes.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules