Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21
CISCO 2020 Dot com Bubble Stock vs 2021 Bubble Tech Stocks Warning Analysis - 6th Oct 21
Precious Metals Complex Searching for a Bottom - 6th Oct 21
FB, AMZN, NFLX, GOOG, AAPL and FANG+ '5 Waves' Speaks Volumes - 6th Oct 21
Budgies Flying Ability 10 Weeks After wings Clipped, Flight Feathers Cut Grow Back - 6th Oct 21
Why Silver Price Could Crash by 20%! - 5th Oct 21
Will China's Crackdown Send Bitcoin's Price Tumbling? - 5th Oct 21
Natural Gas News: Europe Lacks Supply, So It Turns to Asia - 5th Oct 21
Stock Market Correction: One More Spark to Light the Fire? - 5th Oct 21
Fractal Design Meshify S2, Best PC Case Review, Build Quality, Airflow etc. - 5th Oct 21
Chasing Value with Five More Biotech Stocks for the Long-run - 4th Oct 21
Gold’s Century - While stocks dominated headlines, gold quietly performed - 4th Oct 21
NASDAQ Stock Market Head-n-Shoulders Warns Of Market Weakness – Critical Topping Pattern - 4th Oct 21
US Dollar on plan, attended by the Gold/Silver ratio - 4th Oct 21
Aptorum Group - APM - High RIsk Biotech Stocks Buy, Sell, Hold Investing Analysis for the Long-run - 3rd Oct 21
US Close to Hitting the Debt Ceiling: Gold Doesn’t Care - 3rd Oct 21
Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
Original Oculus VR HeadSet Rift Dev Kit v1 Before Facebook Bought Oculus - 3rd Oct 21
Microsoft Stock Valuation 2021 vs 2000 Bubble - Buy Sell or Hold Invest Analysis - 1st Oct 21
How to profit off the Acquisition spree in Fintech Stocks - 1st Oct 21
�� Halloween 2021 TESCO Shopping Before the Next Big Panic Buying! �� - 1st Oct 2
The Guide to Building a Design Portfolio Online - 1st Oct 21
BioDelivery Sciences International - BDSI - High RIsk Biotech Stocks Buy, Sell, Hold Investing Analysis for the Long-run - 30th Sep 21
America’s Revolving-Door Politics Behind the Fall of US-Sino Ties - 30th Sep 21
Dovish to Hawkish Fed: Sounds Bearish for Gold - 30th Sep 21
Stock Market Gauntlet to the Fed - 30th Sep 21
Should you include ESG investments in your portfolio? - 30th Sep 21
Takeda - TAK - High RIsk Biotech Stocks Buy, Sell, Hold Investing Analysis for the Long-run - 29th Sep 21
Stock Market Wishing Away Inflation - 29th Sep 21
Why Workers Are NOT Returning to Work as Lockdown's End - Wage Slaves Rebellion - 29th Sep 21
UK Fuel PANIC! Fighting at the Petrol Pumps! As Lemmings Create a New Crisis - 29th Sep 21
Gold Could See Tapering as Soon as November! - 29th Sep 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market 6 Year Cycle Peak is Near

sitenews / Cycles Analysis Aug 31, 2011 - 02:45 AM GMT

By: Clif_Droke

sitenews

Best Financial Markets Analysis ArticleIn just a few weeks the Kress 6-year cycle will peak. What transpires in the financial market in the weeks and months following this important event will be partly determined by the reactive policies of the central bank. But in the longer-term scheme of things, even the Fed is powerless to stop the events that will increase in intensity beginning next year and into the year 2014.


In this article we'll examine how the 6-year cycle influences the financial market outlook in its relationship to the longer-term cycles. Although the 6-year cycle is one of the smallest of the yearly Kress cycles, it is by no means irrelevant. Despite its diminutive size it typically packs a wallop, especially when the nearest long-term cycle is in its declining phase, as is the case this year.

Let's take a look at the last few peaks and bottoms of this cycle. In 2008, when the 6-year cycle descended with a mighty crash, it nearly brought down the entire global financial market. The final "hard down" phase (i.e. last tenth) of the previous 6-year cycle in 2008 was also exacerbated by the subprime mortgage crisis. From this we can surmise that the 6-year cycle has a much larger impact when the financial market's internal bias is to the downside. Yet even this downward bias is the product of the long-term cycles which comprise the Kress 120-year cycle. These long-term cycles have been mostly in the declining phase since 2000, with the final "hard down" phase beginning in 2008.

The effect of the previous 6-year cycle bottom in late 2002 was doubled by the simultaneous bottom of the 12-year cycle that year. You may recall that 2002 was the year that witnessed a great bear market in Internet and tech stocks. The lifting of the cyclical downside pressure associated with the 6-year cycle in late 2002 led to an equities market in rebound in 2003 and beyond, showing the power of this particular cycle.

There are two conclusions which can be drawn from our study of the 6-year cycle thus far. The first is that whenever it bottoms, it always has a material impact on equity prices unless the yearly cycle of the next highest degree is rising (which mitigates the downward force of the bottoming 6-year cycle). This explains why the market was able to keep rising after the year-year cycle peaked in 2005, because the 10-year and 12-year cycles were still rising.

One notable event that occurred in 2005 during the peaking of the 6-year cycle, however, was the London bombings on July 7 that year. Six years later, during the latest 6-year cycle peaking phase, we witnessed yet another violent outburst in London, this time in the form of rioting that took place between August 6-10. Also in July this year we witnessed the Oslo, Norway bombing and shootings. We've seen that there is a correlation between peaks and bottoms of the 6-year cycle and stock market turning points. Could there also be some correlation between 6-year cycle peaks and violent behavior? I leave that for future research to decide.

In the case of the 6-year cycle peak of late 1996, the powerful 30-year cycle component of the 120-year Master Cycle was still rising. This in turn propelled stocks to higher highs until the 30-year cycle peaked in late 1999 - a year which also witnessed the 6-year cycle peak and was followed by a bear market in 2000 and beyond.

By contrast, in those years in which the next cycle of highest degree is falling, the bottom of the 6-year cycle will exert a decidedly negative impact on stocks. In 1990, for instance, the 6-year cycle bottomed later that year along with the 12-year and 24-year cycles. Because these two larger cycles were in the final "hard down" phase heading into 1990, it came as no surprise that 1990 witnessed a bear market along with 271 bank failures.

The chart below depicts the 6-year cycle in its peak and trough phases from 1984 and beyond. The final 6-year cycle components of the 120-year cycle, after peaking in a few weeks, will bottom in late 2014.

The year 1993 also witnessed a peak of the 6-year cycle. Although the Dow Industrials did peak in late September/early October along with the cycle and declined into late October, the worst of the damage didn't occur until a few months later in the winter and spring of 1994, during which time the 10-year cycle was in its final "hard down" bottoming phase.

The infamous year 1987 also witnessed a peak of the 6-year cycle which occurred around the time of the October '87 stock market crash. The October '87 market crash was arguably the most textbook example of a 6-year cycle peak and its direct impact on stock prices in recent memory. The market imploded on October 19, 1987 - just a couple of weeks following the orthodox peak of the 6-year cycle.

In light of this brief overview of the 6-year cycle, investors should exercise caution after September and entering the October period of the latest peak of the 6-year cycle, given the market's historical tendency to underperform following this cycle's peak.


Price of Gold

Gold closed under its dominant immediate-term trend line on Wednesday, Aug. 24, to break the immediate-term momentum that gold had enjoyed through the last two months. Although the immediate-term trend line was broken, the recent action of the gold price shows that the important 30-day moving average has acted as a strong support and has managed to reverse the recent selling pressure in gold (see chart below). This encouraged the buyers to jump in and take advantage of the support and they ended up bidding gold back up to the $1,833 level as of Tuesday, Aug. 30.

Although gold still remains above the dominant short-term 30-day moving average, there are reasons for being concerned about gold's short-term outlook. For starters, the gold price has clearly been galvanized by the extremely high levels of fear over the debt situation. Indeed, gold fed off this unabated fear for most of July and August before the fear temporarily broke last week during an interim weekly cycle bottom.

Although we're entering a bullish seasonal time frame for gold, there is reason to believe that while the 6-year cycle is peaking in September - which presumably will be positive for equities - gold could lose some of its luster until the cycle peaks around Oct. 1. For that reason gold investors might want to think about taking some profits acquired during the recent run-up and raising stops on existing short-term trading positions. The 30-day moving average is a key support/benchmark to watch in the near term.

 

Gold & Gold Stock Trading Simplified

With the long-term bull market in gold and mining stocks in full swing, there exist several fantastic opportunities for capturing profits and maximizing gains in the precious metals arena. Yet a common complaint is that small-to-medium sized traders have a hard time knowing when to buy and when to take profits. It doesn't matter when so many pundits dispense conflicting advice in the financial media. This amounts to "analysis into paralysis" and results in the typical investor being unable to "pull the trigger" on a trade when the right time comes to buy.

Not surprisingly, many traders and investors are looking for a reliable and easy-to-follow system for participating in the precious metals bull market. They want a system that allows them to enter without guesswork and one that gets them out at the appropriate time and without any undue risks. They also want a system that automatically takes profits at precise points along the way while adjusting the stop loss continuously so as to lock in gains and minimize potential losses from whipsaws.

In my latest book, "Gold & Gold Stock Trading Simplified," I remove the mystique behind gold and gold stock trading and reveal a completely simple and reliable system that allows the small-to-mid-size trader to profit from both up and down moves in the mining stock market. It's the same system that I use each day in the Gold & Silver Stock Report - the same system which has consistently generated profits for my subscribers and has kept them on the correct side of the gold and mining stock market for years. You won't find a more straight forward and easy-to-follow system that actually works than the one explained in "Gold & Gold Stock Trading Simplified."

The technical trading system revealed in "Gold & Gold Stock Trading Simplified" by itself is worth its weight in gold. Additionally, the book reveals several useful indicators that will increase your chances of scoring big profits in the mining stock sector. You'll learn when to use reliable leading indicators for predicting when the mining stocks are about o break out. After all, nothing beats being on the right side of a market move before the move gets underway.

The methods revealed in "Gold & Gold Stock Trading Simplified" are the product of several year's worth of writing, research and real time market trading/testing. It also contains the benefit of my 14 years worth of experience as a professional in the precious metals and PM mining share sector. The trading techniques discussed in the book have been carefully calibrated to match today's fast moving and volatile market environment. You won't find a more timely and useful book than this for capturing profits in today's gold and gold stock market.

The book is now available for sale at: http://www.clifdroke.com/books/trading_simplified.html

Order today to receive your autographed copy and a FREE 1-month trial subscription to the Gold & Silver Stock Report newsletter. Published twice each week, the newsletter uses the method described in this book for making profitable trades among the actively traded gold mining shares.

By Clif Droke
www.clifdroke.com

Clif Droke is the editor of the daily Gold & Silver Stock Report. Published daily since 2002, the report provides forecasts and analysis of the leading gold, silver, uranium and energy stocks from a short-term technical standpoint. He is also the author of numerous books, including 'How to Read Chart Patterns for Greater Profits.' For more information visit www.clifdroke.com


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments

Dave Fargo
31 Aug 11, 19:09
Fed All-Powerful

Please stop saying things like "the Fed is powerless", all of you. They are all-powerful, they have injected the maximum available dosage of economic poision, the patient is critical, the only debate is how many more thrashes before flatline.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in