Stock Market Cycles 2

BarroMetrics Views: Stock Market Cycles 2

Kress has 12 cycles, “2, 4, 6, 8. 10, 12, 20, 24, 20, 40 and 60”, all of which are related to the Fibonacci sequence in one way or another. The most important are the “2, 6, 10 and 30”.

CHIEF CHARACTERISTICS

Two Year: The ‘rule of alternation’ – an up year followed by a down year and vice versa.  But when larger cycles conflict, then the Rule of Alternation can be distorted.

Six Year Cycle: The 6-year cycle is due to peak in  late Sept/early October 2011.

Thirty Year Cycles: This is the dominant yearly cycle for equities. These cycles have a standard deviation of one or two weeks. This means that this cycle which peaks/bottoms in late Sept/early October, can form a high or low as early as mid Sept to as late as mid Oct. The last peak was in 1999 and a low is due in 2014.

Sixty Year Cycle; This is a composite cycle  that peaked in 1984 and is due to bottom in 2014.

Putting aside the 2-year cycle, there are only two cycles left that are pointing up:

  1. The 6-year due to peak in 2011 and
  2. The 4-year due to peak in 2012.

After that there is only the 2-year which is expected to peak in 2011, bottom 2012, peak 2013 and bottom 2014. As you can see, Kress cycles are looking for a major bottom in 2014.  In other blogs, I have expressed a similar view although arriving at the conclusion via a different route. If the Kress cycles are valid, I expect to see the 2011 high (Sept/Oct) to be a major high and the 2012 high to be a secondary one.

4 thoughts on “Stock Market Cycles 2”

  1. Ray, u said nifty will touch 6003-6004 by the end 2010, and S&P will touch 1200 levels and before that it will retest level of 4540/ 1000 levels or so. Nifty has gone on and has almost reach 5900 levels by september 17 2010, while S&P is 1125. Does this mean decoupling of Indian markets has started and if decoupling theory is not accepted by you then wht will be the scenario a) Nifty staying sideways around 6000 while S&P catches up and reaches 1200 OR Nifty makes new highs and if so what 6300-6350, by the end of the year

  2. Hi Bacs

    Thanks for the question.

    I take the view that ‘coupling’ relates to direction rather than magnitude. Given that definition I see no evidence of ‘decoupling’.

    As far as your suggestions are concerned. Both good ones and either are possible. I don’t have a view either way.

  3. But when it comes to financial investment take heed of the following wise words ” it is very important to remember that one’s future financial investment should be placed in the hands of trader who are qualified to advise rather than qualified to sell”

Leave a Reply

Your email address will not be published. Required fields are marked *