Seasonality/Cycles

In the weekend report I discussed the impending stock market yearly cycle low and three year cycle low in the CRB that are both coming due together this summer. A yearly cycle low in stocks is the second most severe selling event ever seen in the stock market, only exceeded by a four year cycle low, which by the way is due in 2012. The three year cycle low in the CRB is the single most severe selling event for commodities.

If you’re a believer, then watch out, a perfect storm of cyclical patterns.

 

Revisting Kondratieff wave

Found this list that “describes” variables that define a K-wave winter. First here is a Kondratieff chart. The Kondratieff wave is “repeating” in it’s shape, the difficulty is in the time component.

Here are the variables;

In David Knox Barker’s book The K- Wave, is a brief list of the events that have historically marked the Winter season:

“Global Stock Markets Enter Extended Bear Markets”
“Trends During Winter: Stocks Down, Bonds Up, Commodities Down”
“Interest Rates Spike In Early Winter Then Decline Throughout”
“Economic Growth Slow or Negative During Much of Winter”
“Commercial and Residential Real Estate Prices Fall”
“Bankruptcies Accelerate and High Debt Eliminated by Bankruptcy”
“Social Upheaval and Society Becomes Negative”
“Banking System Shaken and New One Introduced”
“Free Market System Blamed and Socialist Solutions Offered”
“National Fascist Political Tendencies”
“Debt Level Very Low After Defaults and Bankruptcy”
“Trade Conflict Worsen”
“View of the Future at a Low Ebb”
“New Work Ethics Develop Since Jobs are Scarce”
“Greed is Purged from the System”
“Real Estate Prices Find Bottom”
“There is a Clean Economic Slate to Build On”
“Investors are Very Conservative and Risk Averse”
“Interest Rates and Prices Bottom”
“A New Economy Begins to Emerge”
“Stock Markets Reach Bottom and Begin New Bull Markets”

Certainly evidence can be found [quantitative] to support many of the variables quoted. Food for thought.