The ancients measured time by the moon’s cycle, which is the interaction of the moon and sun throughout the solar year (full moon/new moon). Over time the measurements of the heavens became much more exacting; through that process, the Zodiac and geometry were derived to describe the events within the yearly cycle.
There are multiple definitions of a cycle, but generally, we define it as a set of events regularly repeated in the same order. Think of the best well-known cycle of winter, spring, summer, and fall.
We apply cycle theory to markets and have found it helpful doing so. In our opinion, markets are not a random walk and thus are predictable to a greater degree than most realize. Some cycles are regular, repeating in a timely manner, but others are irregular in that they may have changeable but predictable peaks and troughs.
Speculation, as applied to markets, is by definition the prediction of events based on past patterns/cycles. If one has the pattern/cycle right, one will be profitable. It is up to the speculator/trader to find these repeating patterns/cycles and back-test them to see the probability of recurrence and the profitability. It may be tedious, but it is well worth the effort if one is to make trading and speculation a profession. But there are some shortcuts available on the internet. One only needs to search using keywords such as “stock market cycles” or the more esoteric “planetary stock trading.”
Planetary stock trading is not as goofy as one might suppose at first look. The planetary cycles from small and fast to large and slow are based on natural law. The Golden Ratio is evident within them. Let’s take a beauty of a natural relationship, the cycles of Venus and the Earth. Venus cycles around the sun every 224.7 days, and the earth does so every 365.24 days. The synodic cycle of the pair is 584 days. Taking 224.7 and dividing that by 365.24, we arrive at .6152, close to the golden ratio (.618). If we divide the synodic period of 584 by 365, we arrive at 1.6, again very close to the golden proportion.
Plato called it the music of the spheres. In his view, each planet had its own vibration, and the interplay between them exhibited not only the golden ratio but also relationships similar to musical octaves. One can search on this using the keywords “law of vibration” for more detailed information.
All things in the universe have a vibration, and stocks and commodities do as well. That is why we study natural law and apply it to our work. Some relationships are powerful, others not so much. Each instrument that is traded has its personality/ vibration. Just pull up a few charts, and one will see what we mean. Some stocks we can’t trade very well and others we do pretty well in. It’s similar to people we are drawn to in life and others we avoid.
Now, as to our 60-year Master Cycle or the 1962 analog, as stated, we believe the market bottomed for the year on June 17th, nine days ahead of the low in 1962, which was on June 25th. So if we were to have a similar length of time (60 days/degrees) to the next tradeable swing high, it would put us on or about August 16th. We mark that week on our calendar.
This will be our last “Bear Growls” weekly market note for TradeZero. We have enjoyed the experience over these past two years and we thank everyone for their support and readership. We would also like to thank the ownership and management of TradeZero especially. One can follow us on Twitter at @EquityNY. Trade well and stay safe. JHS
TradeZero compensates Jonathan Stephens for producing this content (“Content”). The Content represents only the views and opinions of Mr. Stephens. Mr. Stephens’ trading experiences and perspectives are unique to him. TradeZero does not endorse the Content and makes no representations or warranties with respect to the accuracy of the Content. TradeZero makes the Content available for information and educational purposes only and it should not be considered trading or investment advice or a recommendation as to any security or trading strategy. Trading can involve high risk and potential loss of funds. Any links to third party sites are not under the control of TradeZero and TradeZero is not responsible for the accuracy of the content on such sites.
TradeZero provides self-directed brokerage accounts to customers through its operating affiliates: TradeZero America, Inc. a registered broker-dealer and a member of FINRA and SIPC; TradeZero Inc., a dealer registered with the Securities Commission of the Bahamas; and TradeZero Canada Securities ULC, an IIROC member firm and member of CIPF.