Cycles, Do They Repeat Or Rhyme?

March 3, 2009 — 1,554 views  
Become a Bronze Member for monthly eNewsletter, articles, and white papers.

Cycles have been repeating from the beginning of time. The use of our clock is a cycle. There are sixty seconds in a minute, sixty minutes in an hour, two twelve hour cycles or twenty four hours in a day. The ancients used the moon cycle which is a twenty nine day cycle. The four seasons are a cycle of roughly ninety days for each cycle or season. Cycles are endless and the ancients seem to have been most fascinated with time and cycles of time. This was their clock. The ancient Egyptians, Mayans, Greeks and countless other civilizations based everything that they did on cycles to keep track of time. They used the cycles for the planting of food, harvesting, and even reproduction. Since we know cycles repeat, do they effect the markets, or even sports? Perhaps they do.

Lets first examine the 17 year cycle (cicada cycle). In 1991, the United States of America was in a recession. The recession occurred after a long bull market run that started in 1982 and lasted 7 years until 1989. The president at the time was George H.W. Bush. The United States had just entered a Gulf War which was against Iraq. The NFL New York Giants football team won the Super bowl against the Buffalo Bills that were located in the north east part of the United States. 17 years later in 2008 the President is George W. Bush, the United States is fighting another war in the Gulf against Iraq. The NFL New York Giants win the Super Bowl against the New England Patriots(NE Patriots are located in the north east of the United States). Perhaps this is just a coincidence or maybe there is something more to the cycles.

In 1907 the stock market had a one year crash that was very similar to what we are seeing today. Please note that this is 100 years. The stock market peaked in October of 2007. We have now approached the one year anniversary from that 2007 high. In 1907 and 1908 the Chicago Cubs baseball team made the playoffs in consecutive years. The Chicago Cubs repeated that feat in 2007 and 2008 by making the playoffs in consecutive years, exactly 100 years later. The irony of the story is that a cub is is a baby bear. This market is a bear market. In 1907 it was JP Morgan who came to the rescue and in 2008, exactly 100 years later it is JP Morgan Chase who is again coming to the rescue.

The Mayan civilization used a very advanced calender and cycle system. As most of us now know the 2012 cycle is when all the Mayan cycles converge. This event signals the end of an age and a beginning of the next age. However, there is one cycle that stands out to me. It is called the 'Mayan long count'. This is a 52 year cycle that ends naturally in December 2012 with the rest of the Mayan cycles. If we subtract 52 years from 2012 we get 1960. This was a pivotal time in the U.S. If we subtract 104 (2*52) from 2012 we get 1908. As we all know this bear market is very similar to the 1907 stock market crash which ended in 1908. You can draw your own conclusions.

The last cycle that I will examine is the 10 year cycle. Ten is known as a perfect number, hence perfect 10. Therefore, I personally watch the 10 year cycle and multiples of ten. In the year 2000, major stock indexes began a new bear market. 2010 will be the 10 year anniversary from the 2000 bear market. The market also sold off in 1910 and 1911. This is also 100 years from 2010. Many times market tops are formed in the ninth, zero, and one years of decades. For example 1929, 1910, 1920, 1980, 1990, and 2000 just to name a few.

Whats the conclusion? This is a severe bear market without question. Short term traders appear to be the only people benefiting from the volatile market. This type of environment should last for several years to come. If you are going to invest or trade it is imperative to know and understand the mechanics of the market and not the Wall Street Hype.

Source: Nicholas Santiago,
The Leader In Market Technical Guidance