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3,141 days PI Waves and Equities
Like finding a location on a map, the best way to find our current position in the Cycles affecting Equities is by looking at the big picture first. The largest well known cycle is the K-Wave, or its more complex and precise variation the PI Economic Confidence Model, but we should also look at other cycles like the Decennial and four year Election cycles. You can learn more about Martin Armstrong's PI Economic model and his constitutional fight with the US government here . ![]() ![]() The Calendar modelThe Calendar model unites the concept of K-Wave seasons with the 51.6 year economic cycle year of the PI model. One 51.6 year cycle is made up of 4 idealized seasons of 12.9 years and we should expect markets to turn significantly near these 12.9 year boundaries. We can see that empirical data matches this very well with the market making turns in 1929, 42, 55, 68, 81, 94 and 2007, but also the middle series as well in 1935, 48, 61, 74, 87, 2000 and 2013. Charts courtesy of StockCharts.com Equities and the decennial cycleWhile this cycle is not part of the Economic models, I have nonetheless included it here since it can not be ignored with the statistical deviation shown in the chart and table below. We must also consider the frequency of major highs being made at the decennial boundary like the USA in 1929, Japan in 1989 and the Nasdaq in 2000. We can also see the effect of the sub-harmonics like the 2.5 and 5 year cycles in the price action of 1982, 1987 and 2002. Also note that most of the gains of the 10 year cycle were made in the first 2.5 years of the cycle, with the subsequent 2.5 years more volatile. It is in this part of the decennial cycle that many serious declines occur which can be good buying opportunities, like in 37-40 (1937 down 33%), 87-90 (87 crash down 30%), 97-2000 (98 crash down 20%) and 2008-09 (down 50%). ![]() ![]() Charts courtesy of StockCharts.com The well known 4 year Election cycleOnly a few of the 4 year cycle lows have been minor since 1948, and it could be argued that the 1987 crash was the delayed effect of the suppressed 1986 cycle low. Charts courtesy of DecisionPoint.com The Laws of HarmonicsThe Laws of Harmonics dictate that smaller sub-harmonic cycles like a 2 and 1 year cycle should also be present and we do find evidence of this. Charts courtesy of StockCharts.com |
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