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”.
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:
- The 6-year due to peak in 2011 and
- 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.