|STOCK MARKET TIMING U.S. STOCKS|
'Outposts' are dates when a cycle reaches specific points in its circuit. There is evidence to think that all phenomena are cyclical. Some are easy to observe and measure. Take the sun. As the earth rotates, we experience day and night. The cycle is about 24 hours. As earth rotates around the sun and the moon rotates around the earth, we on earth experience full moons. The cycle is about 29 days.
These occurrences are purely physical events. But they have well defined correlations with biological and pyschological parallels. Annual bird, animal, and fish migrations. Appearances and disappearance of insects (the 17-year-locust phenomenon). The rising incidence and culmination of human births, crime, and eudaemonic activity around full moon.
Less observable but no less measurable or effective are other cycles, longer and shorter, that have comparable effect on biological and psychological organisms from which human beings are not excluded.
The stock market is a made-to-order barometer of the great cycles of human mass emotion which sweep through the decades and centuries. The 10-year price patterns which from time to time get renewed attention in the popular press and public media has its correlative in the synodic period of two outer planets. A synodic period is the time it takes for a pair of planets to return to their starting point, that is, when they line up with each other and the sun. The pair we are tracking now in the present context has a period of approximately 36 years.
A cycle that long is totally unnoticeable to unaided human attention, unlike the easy observation of night and day or summer and winter. Everything is greatly slowed down. And its psychological effect is more lasting and profound than the ephemeral arrival and departure of the day or the full moon.
Synodic cycles evince multiple outpost dates for each event within their periods. An event is a recorded milestone in space from the beginning of a cycle to its end. In the shorter synodics, these dates are tightly clustered. In a long synodic, proportional to the length of its period, the cluster dates are notably disbursed. This is the case with our present example. The cycle period is c. 36 years. Its related event dates can be disbursed across nine months or more as in the current case. But the whole cluster is treated as a singular-event set in its effect on human mass psychology.
There appears to be a delay, or lagged effect, in the influence of a synodic event on market prices. Future outposts are based on this expectation. That points up some of the limitations of looking back to anticipate what's ahead. First and foremost, there are not enough observations for any kind of statistical analysis. We would need well more than 1,000 years of stock prices to consider the 36-year period we are discussing. Though it is attractive to attempt to use statistics, I and others doubt that they can usefully apply. See Taleb. Secondly, it is not reasonable to treat any single series of events in isolation. There are myriad cycles, each interplaying with one another and having effects, large and small, on the others' apparent singular behavior.
Nevertheless, it is intuitively reasonable to invest a controlled commitment to a view of the large tableau which past planet events and their market corollaries may offer us in our current day-to-day decision-making.
Summary of the present situation. Substantially downward markets starting in August and September (click here for approximate dates), followed then by another one to three years of strong, healthy markets with record new highs.
January 28, 2004
Note. My weekly stock-price archives go back only to 1915. If any reader can supply me with early market prices, I will extend this study as far back as I can get data for. I have monthly prices to 1790, but they are not granular enough for the 36-year (and other) cycle analyses. If you have old weekly prices pre-1915 and wish to share them, please write to me personally at Copernicus Long Cycles--Current Impact.
© 2004 THE 2000