Business Cycle Buy & Hold Strategy

[malyla]

I thought it might be a good to start a discussion about this position trade strategy. It is based on the 8.6 year Business Cycle developed by Martin Armstrong at Princeton Economics princetoneconomics.blogspot.com/2006/06/86-year-review.html

He had a little problem with the CIA which he pleaded out and is now serving time for fraud http://en.wikipedia.org/wiki/Martin_A._Armstrong This info has been modified since last I looked at it:confused:

His cycle seems to follow the stock market fairly well, but some say that this is the case due to data mining after the fact. (Can't find the post where this was discussed - will post when I find it)

I back tested the method and it provides an amazing return over a 17 year period. The excel spreadsheet can be found here http://www.tsptalk.com/mb/showpost.php?p=171093&postcount=112. It shows an amazing ability to safeguard your investment in a bear market.

alevin has another method that may verify/support this strategy and I will post first in her thread and then here any findings in support of the BCBH postion strategy.

I'm starting a tracker for this strategy.

That's it for now. Good luck out there.

[malyla]

Patiently waiting for June 2011 (the end of this bear market) to move into stocks. Bonds are doing well again (positive return ytd).

Just waiting.......:) But TSP is safe (Baring a worldwide financial collapse).

Oh so bored..... time to look at ETF trading in my personnal account. I've got to put some of this market knowledge to work while I wait for the Bear to get sleepy again. See you at ETFTALK.

[malyla]

Here is the 'latest' from Armstrong. He wrote it in prison.

http://www.contrahour.com/contrahour/files/ItsJustTimeMartinArmstrong.pdf

I am a little perplexed with the March 2008 - March 2009 prediction of an upswing in stocks as this did not happen, however, I also recognize that the excessive government intervention and unbelievable bank leveraging may just have caused an anomalous element to be present which does not follow his theory. I am still reading his paper to determine if this biz-cycle theory may still be valid. Page 22-27 are very interesting (gets to the point finally - "Europe knows all about cancelling currencies").

[Steadygain]

Here is the 'latest' from Armstrong. He wrote it in prison.

http://www.contrahour.com/contrahour/files/ItsJustTimeMartinArmstrong.pdf

I am still reading his paper to determine if this biz-cycle theory may still be valid.

This was a fantastic read and there is no doubt The Biz-Cycle Theory is well validated by the most brilliant and financially gifted minded individuals to live.

This is the main reason why High Risk should dominate from the bottom to the top and Safety should dominate from top to bottom.

Thanks so much for sharing this.

[Birchtree]

This article is also pertinent: http://safehaven.com/article-13145.htm

[Steadygain]

This article is also pertinent: http://safehaven.com/article-13145.htm

Thus, as the shadow banking system continues to collapse, velocity should move well below its mean, greatly impairing the efficacy of monetary policy. This means that M2 growth will not necessarily be transferred into higher GDP. For example, in Q4 of 2008 annualized GDP fell 5.8% while M2 expanded by 15.7%. The same pattern appears likely in Q1 of this year.


I see this quote as the most fundamental KEY to understanding the overall picture - but a lot of info to digest. Looking at the nuts and bolts undoubted forces us to recognize many complicated pieces.

Still the cylinical waves - dominate everything

[malyla]

This article is also pertinent: http://safehaven.com/article-13145.htm

Thanks Birchtree.
"In the U.S. from 1874-94 and 1928-41, Treasury bonds returned 0.9% and 7% per annum, respectively, more than common stocks. In Japan's recession from 1988-2008, Treasury bond returns exceeded those on common stocks by an even greater 8.4%. Thus, historically, risk taking has not been rewarded in deflation. The premier investment asset has been the long government bond" from http://safehaven.com/article-13145.htm (http://safehaven.com/article-13145.htm)

The back testing I did following the method of going into safety (F fund) during recessions (recessions are economic downturns as defined by Armstrong's 8.6 Business Cycle) is surported by this article on deflationary pressures in economic downturns. The link of deflationary GDP to the National debt was eye-opening. Thanks again.

[malyla]

Here is the 'latest' from Armstrong. He wrote it in prison.

http://www.contrahour.com/contrahour/files/ItsJustTimeMartinArmstrong.pdf

Page 22-27 are very interesting (gets to the point finally - "Europe knows all about cancelling currencies").

Armstrong did mention this current uptrend with an ending date of April 16, 2009. That makes this a very interesting week - will we get above the high of last week(4/17/09)?
According to Armstrong, there should be another uptrend at the end of 2009 and late summer 2010 before the bottom in June 2011 and the resumption of a bull market (page 26). I will follow this with interest.

[malyla]

This is the main reason why High Risk should dominate from the bottom to the top and Safety should dominate from top to bottom.

Thanks so much for sharing this.

Interesting way to put tsp investing. Thanks and you are welcome :)

[malyla]

Now here is the latest from Martin Armstrong http://fofoa.blogspot.com/2009/04/martin-armstrong-on-goldman-sachs.html

Not about the business cycle but his take on the Goldman-Sachs conspiracy(dated April 9, 2009)

FWIW

A pdf can be found here http://www.scribd.com/doc/14227076/Behind-the-Curtain4909

with a followup article(pdf) here http://www.scribd.com/doc/14268132/Financial-Panics-Political-Change

You will need to signin to download the pdf but you can read it without signing in.

Armstrong certainly has a lot to say.....

[malyla]

There is a MoneyWeek online article this week about Martin Armstrong here
http://economicedge.blogspot.com/2009/04/martin-armstrong-moneyweek-article.html

You can also get the pdf articles from this blogspot without signing in.

The SEC has agreed to look at Armstrong's case. Lets hope he doesn't have any accidents before he gets his review.

[Steadygain]

There is a MoneyWeek online article this week about Martin Armstrong here
http://economicedge.blogspot.com/2009/04/martin-armstrong-moneyweek-article.html

You can also get the pdf articles from this blogspot without signing in.

The SEC has agreed to look at Armstrong's case. Lets hope he doesn't have any accidents before he gets his review.

Malyla,
I'm just closing up - so will come back tomorrow to catch up.

There are 3 (only 3) that stood out to me as TRUE GENIUSES

1. Paul Krugman - winner of 2008 Noble Prize in Economics

2. Adam Hamilton - only discovered him within the week (from Lady)
He is the one that convinced me we hit the BOTTOM

3. Martin Armstrong - today from you. I saved his PDF earlier and will come back to this stuff tomorrow.

It is very rare someone screams out to me as being a Genius, but when they do I lose myself and thoroughly enjoy it.

Thank you !!! and have a wonderful night.

Steady

[malyla]

Here is the 'latest' from Armstrong. He wrote it in prison.

http://www.contrahour.com/contrahour/files/ItsJustTimeMartinArmstrong.pdf

Page 22-27 are very interesting (gets to the point finally about his cycle theory- "Europe knows all about cancelling currencies. Americans do not").

Well, I finished his treatise and have one outstanding thought - There is brillance here but he will need to reorganize this paper in a more scholaly manner to get the attention it deserves.

As I have previously mentioned, pages 22-27 are very good in their explaination of his economic confidence model. Of note are pages 39-55 which is a good primer to the modern economy with reasons why it's good to have derivatives, etc... (AIG is mentioned). Also of note are pages 69-77 which talk about his solution to this financial mess the world is in. All three of these sections had some good surprises and some ideas I have seen on other blogs (independent or co-influenced?). I did have a little problem with the ranting (sounds like justifiable ranting, but why would our system allow this kept popping up while I read it) in pages 56-68 although the account of his meetings and interviews about manipulations were of concern to me if true. His account of how he made a thinking computer that self destructed when seized by the CIA leaves me perplexed as this would take a software genus and why would the US waste that resource???

I do not know how many of you out there have read Issac Asimov's Foundation series, but Armstrong would fit right into that galaxy. In that series, a mathamatical model called psychohistory was developed to predict human behavior and the rise and fall of empires on a large scale. A very good series of books. Maybe Armstrong is our reallife Hari Seldon?

Waiting to see if something in the economy peaks in Jan 2010 and Aug 2010 to validate this model. If the market closes this week higher than last week, does that invalidate the April 16, 2009 peak or has something else (other that the stock market) peaked on that date (currency, housing, oil, etc...)?

Life is interesting.

[Steadygain]

Issac Asimov's Foundation series

Oh Malyla - I don't have the time or energy to fall in love ...

Science Fiction is like everything to me :)


So I'll tell you something I've never told anyone before...;)

My greatest endeavor - my dream of all dreams - is to create something that essentially attaches our brains. Something that connects the rhythms and waves - the chemical reactions and everything - so when we do connect there are no boundries or awkwardness or anything remotely impairing our union and ultimately our communication.

..... Fast foward a few years.... then when you and I put our helmets on - even though we're miles and miles apart and have never seen each other - with our helmets on we actually feel the emotions and experience the excitement when taking about this stuff...

now to me - that would be the ultimate.

[malyla]

So I'll tell you something I've never told anyone before...;)

My greatest endeavor - my dream of all dreams - is to create something that essentially attaches our brains. Something that connects the rhythms and waves - the chemical reactions and everything - so when we do connect there are no boundries or awkwardness or anything remotely impairing our union and ultimately our communication.

..... Fast foward a few years.... then when you and I put our helmets on - even though we're miles and miles apart and have never seen each other - with our helmets on we actually feel the emotions and experience the excitement when taking about this stuff...

now to me - that would be the ultimate.

Eeeww - no offense SG, but that is the last thing I would want. I have enough issues just dealing with my own thoughts and emotions. I will remain a luddite in that area of technological advancement thankyou very much.:cheesy:

I think April 16/17 is going to hold as a peak. Waiting in F for 4th quarter 2009 and the peak in Jan 2010. Business Cycle is getting interesting....

[Steadygain]

Eeeww - no offense SG, but that is the last thing I would want. I have enough issues just dealing with my own thoughts and emotions. I will remain a luddite in that area of technological advancement thankyou very much.:cheesy:

No offense taken whatsoever !

There's no way you could be a luddite in the general sense - and have a love for SF. For SF writers often form the seeds that later bloom into real discoveries.

As this technological advancement is pretty much what my life is all about ... I'd like to expand on this in my Groove and Trip Pad. Somehow I think bringing all the features of my 'dream of dreams' would convince you it's way better than you could imagine.

I think April 16/17 is going to hold as a peak. Waiting in F for 4th quarter 2009 and the peak in Jan 2010. Business Cycle is getting interesting....

Well - here on the 'Business Cycle Buy & Hold' - I'd like to reflect more specifically on Armstrong and I'll tell ya what I think.

As for waiting in F till the 4th Q ... I think that's absolutely Brillant if you're expecting the WORST DAMAGE to follow through the rest of the year.

Given what has happened since last month's low, however, I think there is a high probability that a BULL TREND will dominate the remainer of this year and in fact all the more the next few years.

So I'll go High Risk on 5/1 and stay there. :embarrest::sick:

[Steadygain]

Here is the 'latest' from Armstrong. He wrote it in prison.

http://www.contrahour.com/contrahour/files/ItsJustTimeMartinArmstrong.pdf

I am still reading his paper to determine if this biz-cycle theory may still be valid. Page 22-27 are very interesting (gets to the point finally - "Europe knows all about cancelling currencies").

With a quick review - and all the more with the sense he truly is a Financial Genius - there is no doubt his biz-cycle theory has a high degree of validity.

I personally don't see this as very different from Kress Cylces (and others who have identified cycles or Waves).

What I particularly like about Armstrong's Theory - is how he precisely IDENTIFIES POLITICAL and MONETARY CHANGES which in turn act as the catylist by which these cycles are formed.

I will have to read more closely the entire paper - along with his other works to really form an opinion. I will say briefly that it is highly possible that the entire Economic Peroid he's elaborated on simply reflects our Global Evolving Economy and the changes that evolve over time - different stages - like a baby to infant to child to teen to young adult - to adult.

At this point I'm still under the persuation that most of these waves or cycles are way more NATURAL and 'the Political Realm' and for that matter 'monetary changes' are more a consequence of an ever expanding Global Network.

As for the Cycles themselves - especially in light of the remarkable similaries they've repeated had - it would be next to impossible to not think the pattern would be highly predictablle and to the Greatest Extent it is. He is talking about how we are headed towards a One World Currency - and the inevitable course of the future. But his pattern of our Current Cycle (and the upswing of 3/08-3/09) - when matched against the background of 224 yrs is still remarkably accurate. He is only off by 1 year. The upswing is likely taking place (but time will tell) as I can't completely rule out a 'Bear Rally'.

I believe the most accurate way to determine our current financial situation is by dealing with what is presently at hand and weighing these against all other historical records that are similar to our present condition.

Most of his refections are undeniable FACTS and the subsequent changes by which the Financial Global Network was created. The regularity of cycles (trends - waves) all seem to reflect the Expansion - Crisis - Contraction that occurs over and over wheather you want to blame GOLD :rolleyes: or whatever.

I think he may put a little too much emphasis on GOLD and overlook what appears to be HUMAN NATURE'S INEVITABLE TREND - which is always seeking THE MOST GLORIOUS AND PROLONGED EXPANSION until we reach a CRISIS (Hell breaks loose ... whatever) - and CONTRACTION. Attempts to correct this are short lived and we go through the same cycle over and over.

Until the Global Network honestly operates on a Global System whereby every economy is granted equal protection and they work in harmony with each other - Cycles of Growth - Crisis - Contraction will remain unavoidable.

[malyla]

Here is a blogspot that follows Martin Armstrong's Pi Cycle Theory (a.k.a. Business Cycle Theory).

http://marketvisions.blogspot.com/

Enjoy.

[Steadygain]

Here is a blogspot that follows Martin Armstrong's Pi Cycle Theory (a.k.a. Business Cycle Theory).

http://marketvisions.blogspot.com/

Enjoy.

Malyla,
This is scarey ! It's like you're unraveling the frabics of my being.

The entire Universe is structured on Mathematics and the undeniable FACT that when broken down to the lowest demonator there are a few numbers that ultimately hold the most Royal Positions.

I have never talked about this stuff on the MB - other than to make known that beneth everything - and ultimately when everything is viewed in it's most basic underlying and fundamental terms it all breaks down to Physics and Chemistry.

Our most advanced Civilization occured centuries before Christ in the Era of the Pyramids. Today's civilization - and the civilizations over the years simply see the Pyramid as a huge structure that was meant to function as a tomb. It is only when recognition is given to the Physics and Chemistry - especially the Mathematics behind the Structure that we come to recognize it is a Power House that is in Perfect Harmony with not only Planet Earth - but the Universal Characterics of our Solar System and the entire Galaxy.

He now conveys a far more signifcant message AND IN ALL TRUTHFULNESS THIS IS ENTIRE BASIS OF MY ENDEAVOR TO STUDY THE CYCLE THERORY. I have overwhelmingly been convinced that the 'Natural Laws' are what ultimately determine our Economic Circumstances and not Humanity's Influence.

We (the people of Planet Earth) primarily look at the Economy and our understanding of it's evolution from the foundation of the USA. People came from foreign lands just a few hundred years ago and determined that the inhabitants were inferior and therefore they immediately determined it was their right to not only destroy the culture of the natural inhabitants but to take everything (land and resources) and let the surviving few stay in the deserts. Then they brought slaves (also regarded as inferiors) to spur the economy with hard work. Women of course were largely regarded as insignificant but had a little higher status than the Native Americans and Slaves - as they were fundamental to society. But the powerful gained more power and thus our Economy was formed. With the Industrial Revolution and Electricity - Society immediately became based on Cheap Oil and Coal. As the Big Companies became increasingly powerful - the people of the USA - now went to foreign lands to gather all available resources. In a nutshell this is how most people would have to view our Economy and the Economic Circumstances which evolved to the present Global Network.

I (as Armstrong) have pretty much been convinced that Natural Laws supercede everything - and that IN FACT the dominate waves of BULL - BEAR Trends are more a consequence of these Larger Dynamics that are way over 'our inferior minds and all the more the interactions by which the powerful few subject the population at large' to live the way WE DO.

So the BOTTOM LINE - is looking beyond the garbage (the enormity by which mankind has disrupted the relationships with virually all life and the Planet itself) - and finding the underlying waves that dominate our activities and hence our Economic Picture. This would ultimately guarantee SAFETY during downward Trends and HIGH RISK during the upward ones.

Since Armstrong has chosen an undeniable - and one of the very few Royal Positions - it gives far more validity to his overall Theory.

I am very much ENJOYING THIS !!!

Thank you - my sweet - and have a great weekend.

Steady

[malyla]

Interesting model based on cycle theory. Shows a downtrend coming.

http://www.markettrak.com/special_143.html

Biz_Cycle is still F until mid Nov 2009 for a short upturn then back to safety Jan 2010.

[XL-entLady]

Malyla, I enjoy your finds. Thanks for sharing them with us! Just keep on keepin' the good stuff and sweep the rest out with the trash. :cheesy:

Lady

[alevin]

http://www.[[financialsense.com/fsu/editorials/2009/0430.html

Fibonacci Nightmare

by Walter Roman | April 30, 2009

Print (http://javascript<b></b>:printWindow())
http://www.[[financialsense.com/fsu/editorials/2009/images/0430_clip_image002.jpg

FIBONACCI SEQUENCE: 0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, ...

Well, I did it. I started fooling around with Fibonacci numbers and I scared myself half to death. Leonardo Fibonacci, was perhaps the greatest mathematician of the Middle Ages. The question I posed, “Are we headed for inflation or deflation in 2009?” This Einstein of his day warned, inflation of nightmare proportions and worse, is coming to this nation soon.

As to the question at hand, we have had two periods of hyperinflation in America. The first period was dur­ing the Revolutionary War (not worth a Continental). The second was during the Civil War (greenbacks and graybacks). With 1776 as an obvious starting point, I leapt forward to 2009 and got a Fibonacci 233 years. The Civil War ended in 1865. Leap forward to 2009 from 1865 and you get a Fibonacci 144 years. If you’ve got your thinking cap on you’re already wondering about the length of time between 1776 and 1865, and yes, it is a Fibonacci 89 years.

Are we really headed for ... hyperinflation once again in 2009? This cluster of Fibonacci numbers linking up and landing on the year 2009 is striking and elegant. Leonardo Fibonacci says yes.


Hmm, tuck and roll would seem to be in order somehow. Or is it "Dive, dive, dive"? :sick:

[Birchtree]

There ain't gonna be no inflation for at least two years or more into the future. Get prepared by buying commodity type ETFs or stocks.

[alevin]

I actually am more inclined that way myself, which is why I did a tucknroll this am on a screaming divvy commodity stock-sold some (so I could recycle into another value commod stock), left some on the table (to collect divvy's this month). My non-TSP brokerage investments at the moment are all commodity divvy stocks, ETFs. Workin' on moving my stock IRA mutual funds over into brokerage so I can do some more of just what you said. Fib cycles notwithstanding.

the post is just another piece of information for people to consider risk-wise.

[Bullitt]

Malyla, thanks for the link. I agree that this writer has potential if he could manage to put it together, especially in citing better references. I found this to be an informative read.

However, there are two sides to every story and I find many of his accusations questionable. He never does tell us exactly why he's locked up and uses the term CIA as if it's in reference to a local police department. In many ways this author reminds me of a drug dealer/smuggler who just got busted and spills his guts in order to make everyone believe that he's been wrongfully accused or is just merely a spoke on the wheel while there are much bigger fish to fry. I have yet to meet a 'guilty' person in a prison.

[malyla]

Just back for a quick observation (I'm buried in research papers and need a break).

I was lurking around and read Coolhand's thread (usually the first thread I click on) when he directed me to the Fearless Forecasters message board and a post with TA analysis that uses planets and number analysis but also uses an analysis performed by timingsolutions.com that convolves two cycles called the Jugler and Kitchen cycles to get a cycle that looks very much like Armstrong's 8.6 year business cycle. I include the picture of the convolved cycles from that post here. Does anyone have information on what these two cycles are, why they are convolved, and how the initial conditions are determined? Seems interesting that the shape is the same, but the dates are different. However, to be fair, Armstrong's cycle could just be curve fitting (I still have problems with some of his explanations and how he picked his initial conditions, although, 2003 and 2007 where amazingly accurate.

Anywho... just curious if anyone on the mb uses this or has research it.

http://www.tsptalk.com/images/mb/081709b.gif

http://www.tsptalk.com/images/032008a.gif

[malyla]

The original 8.6yr business cycle plot plotted by Tom a few years ago can be found here http://www.tsptalk.com/mb/showpost.php?p=218137&postcount=436

[tsptalk]

I include the picture of the convolved cycles from that post here.
Did you have a link to the page where that chart can be found? The attachment is a little tough to read. Thanks!

[malyla]

Did you have a link to the page where that chart can be found? The attachment is a little tough to read. Thanks!

Coolhand posted the link - I've copied it here. It's halfway down the post after the astrological analysis.
http://www.traders-talk.com/mb2/index.php?showtopic=110073

[tsptalk]

Thanks. I hope you don't mind, but I inserted the full size chart to your post above.

[malyla]

Thanks. I hope you don't mind, but I inserted the full size chart to your post above.

No worries. However, the chart above the chart you posted was the one that most resembled the 8.6yr business cycle. The chart you posted has some other applets used on it to more closely match real market fluctuations. Both charts are very interesting in that we can trend them as the time goes on and see if these cycle theories continue into the future market trends.

This analysis reminds me of the work that Trader Fred does. Has he heard of Juglar and Kitchen cycles?
Thanks - I haven't figured out how to get the pictures to post in the post. Should really be working anyway:embarrest:

[tsptalk]

Oops. I changed it.

I haven't heard Fred mention juglar and kitchen vycles.

[malyla]

Oops. I changed it.

I haven't heard Fred mention juglar and kitchen cycles.

Thanks Tom. Could you also post the picture of the 8.6yr Business Cycle chart into the post (#27) that follows the one you already fixed. I just put the link that Mojo set up, but it would be more educational to see the pictures of the two close together.

Thanks again.

[tsptalk]

got it

[malyla]

Just back for a quick observation (I'm buried in research papers and need a break).

I was lurking around and read Coolhand's thread (usually the first thread I click on) when he directed me to the Fearless Forecasters message board and a post with TA analysis that uses planets and number analysis but also uses an analysis performed by timingsolutions.com that convolves two cycles called the Jugler and Kitchen cycles to get a cycle that looks very much like Armstrong's 8.6 year business cycle. I include the picture of the convolved cycles from that post here. Does anyone have information on what these two cycles are, why they are convolved, and how the initial conditions are determined? Seems interesting that the shape is the same, but the dates are different. However, to be fair, Armstrong's cycle could just be curve fitting (I still have problems with some of his explanations and how he picked his initial conditions, although, 2003 and 2007 where amazingly accurate.

Anywho... just curious if anyone on the mb uses this or has research it.

http://www.tsptalk.com/images/mb/081709b.gif

http://www.tsptalk.com/images/032008a.gif

Using the convolving of the Juglar and Kitchen cycles we get a 10+ year cycle which is centered on this past 2 years in the market. Still seems like curve fitting.

[malyla]

The latest from Armstrong. A New Yorker article Oct 12, 2009.

http://www.contrahour.com/contrahour/

or

http://www.scribd.com/doc/20783434/cyclesnewyorker101209

ABSTRACT: ANNALS OF FINANCE about Martin Armstrong, cycle theory, and the financial markets. One day, in a newspaper, the young Martin Armstrong came across a list of financial panics between 1683 and 1907. He found that, on average, there had been a panic every 8.6 years. As he read more, he began to suspect that 8.6 was a highly significant number. In the early seventies, Armstrong became a trader and dealer in gold, and began compiling forecasts about commodities and currencies, which he sent out to clients. Over time, forecasting became his business. He constructed what he called an Economic Confidence Model, which he relied on to predict an upturn in the price of commodities in the early days of 1977. It worked. Later, he realized that 8.6 years was exactly three thousand one hundred and forty-one days: 3,141, the number pi times a thousand. If pi was essential to the physical world, perhaps it somehow governed the markets. Pi suggested some future dates of significance, which Armstrong watched carefully as they approached: December, 1989, which marked the Nikkei’s peak before it crashed; July, 1998, the high point in the S & P, just before a Russian default broke the giant hedge fund Long Term Capital management. In 1999, Armstrong published a report explaining the part pi had played in his calculations. That year, he was charged with defrauding Japanese investors of billions of dollars. Armstrong has now spent more than nine years in jail. Discusses the differences between fundamental analysis and technical analysis of the financial markets. Cycle theory is a kind of Gnostic offshoot of technical analysis. Mentions other thinkers who have studied cycles and market timing, including Nikolai Kondratiev, Joseph Schumpeter, Bill Erman, and Arch Crawford. The writer was told repeatedly that some of the biggest investors out there view even the wackier cycle theories with respect. Tells about Edward R. Dewey, a cycle theorist who was the chief economic analyst for the Department of Commerce under Herbert Hoover. In the forties, he formed the Foundation for the Study of Cycles, which endeavored to collect and process as much cycle data as possible. Discusses Fibonacci and the idea that such phenomena as the spirals in the nautilus shells, hurricanes, and galaxies; branches of trees, leaf veins, skeletal and circulatory systems; and the distribution of flower petals and brain waves conform to something called the golden ratio. Also mentions the theories of Ralph Nelson Elliott and Robert Prechter. Tells about Armstrong’s arrest and gives details of the criminal case against him. Writer visits Armstrong at the low-security prison camp on the Fort Dix military base where he is being held.

[malyla]

Martin Armstrong thinks 17.2 months is an important cycle....the fall from October 2007 to March 2009 was 17.2 months.... http://www.martinarmstrong.org/files/The-Two-Phases-of-the-Great-Depression-5-27-2010.pdf (http://www.martinarmstrong.org/files/The-Two-Phases-of-the-Great-Depression-5-27-2010.pdf) hmmm, taking it further, a rally from March 2009 to mid-August 2010 would be 17.2 months, which happens to be the month many technicians are pointing to for "the" top. And 17.2 months four more times would come out to May 2016, when Bob Prechter (in his free April report) predicts the bear market will end. Time will tell how that works out, or not.

Thanks Tsunami for that link. It's always interesting to see what Armstrong is up to. Other cycles also show a top in July 2010 with a low in 2012. I'm still hoping that the low will come earlier as Armstrong predicted (June 2011) so I can move into stocks long term.

[alevin]

Question is, how low will it go and how long will it stay low? I'm seeing other people talking 2015-16 the past couple days too. I saw something last night about a 60 year bear market-didn't have the heart to read it.

will look around for it this morning before I go to work. I hope it sounds like tin foil. If not, all we can do is the best we can do and live day to day grateful for the small things. which we could be doing anyway.

[CountryBoy]

Question is, how low will it go and how long will it stay low? I'm seeing other people talking 2015-16 the past couple days too. I saw something last night about a 60 year bear market-didn't have the heart to read it.

will look around for it this morning before I go to work. I hope it sounds like tin foil. If not, all we can do is the best we can do and live day to day grateful for the small things. which we could be doing anyway.

Get and stay outta debt and pay cash for everything you can, is about the best strategy now. And save as much as possible and try to diversify those savings.

[malyla]

http://www.tsptalk.com/images/mb/081709b.gif

http://www.tsptalk.com/images/032008a.gif

Well, looking at the two plots above, we get the following:

The Juglar and Kitchen cycles are predicting a down wave in the monthly stocks until May 2012; and Armstrong's wave count was off by a year for the secondary up wave in March 2008 (it really started in March 2009), but if it's just a registration error in the date, then his down wave will take us into May 2012.

There are too many similarities between the business cycle and the stock market for me to discount it right now. Back testing of the Biz_Cyc B&H method (100% F in bear markets and 100% I in bull markets as determined by the business cycle) shows a VERY good correlation with a 1200% return since Sept 1991. This compares to a B&H in stocks (40% C, 30% S, 30% I) of 400% since Sept 1991. Avoiding the Bear hits to your portfolio is the key to good long term returns. Amazingly, the LMBF method has returned 500% since Sept 1991 which is better than a straight B&H of stocks mainly because it does avoid losses in an extended bear market.

Time will tell. Still playing it cautious for now and if Armstrong's cycle proves to be off by a year, I will not be going into equities on June 2011, but will wait until June 2012.

I may try to trade, but every time I do, I lose, so maybe not.:notrust:

[JTH]

Well, looking at the two plots above, we get the following:

The Juglar and Kitchen cycles are predicting a down wave in the monthly stocks until May 2012; and Armstrong's wave count was off by a year for the secondary up wave in March 2008 (it really started in March 2009), but if it's just a registration error in the date, then his down wave will take us into May 2012.

There are too many similarities between the business cycle and the stock market for me to discount it right now. Back testing of the Biz_Cyc B&H method (100% F in bear markets and 100% I in bull markets as determined by the business cycle) shows a VERY good correlation with a 1200% return since Sept 1991. This compares to a B&H in stocks (40% C, 30% S, 30% I) of 400% since Sept 1991. Avoiding the Bear hits to your portfolio is the key to good long term returns. Amazingly, the LMBF method has returned 500% since Sept 1991 which is better than a straight B&H of stocks mainly because it does avoid losses in an extended bear market.

Time will tell. Still playing it cautious for now and if Armstrong's cycle proves to be off by a year, I will not be going into equities on June 2011, but will wait until June 2012.

I may try to trade, but every time I do, I lose, so maybe not.:notrust:

Thank you for this update, I did enjoy it and do appreciate the amount of back-testing you had to do.

[tsptalk]

Agree! Thanks malyla!

[malyla]

Today the Business Cycle strategy says go into the market. I have moved the Biz_Cycle tracking account into the I Fund.

I am hesitant to move my tsp account into the market for the reasons I mentioned in the posts below, however, I'm going to risk it and watch. The Kitchen and Juglar cycles say to wait another 12 months, so I'll be managing my account to avoid any large downturns (Will protect the seed corn :D)

[Steadygain]

Malyla,
Having known you over the years and especially considering the lengths by which you have largely remained in F Fund; I'd have to say I am very impressed with this decision.

I know 'my opinion' is meaningless and I don't expect you to feel better knowing how impressed I am. This is such a huge change from a very long ongoing trend that it's like you have a total new and different outlook.

I am in this exact same boat. To me it is far better to consider where we are and where we are most likely going over the long run. I think we'll bounce around with largely side ways stuff - but an Upward Trend will remain for years to come.

Thus the bulk (40% is in I FUND) and 30% is C and S.

[malyla]

Just back for a quick observation (I'm buried in research papers and need a break).

I was lurking around and read Coolhand's thread (usually the first thread I click on) when he directed me to the Fearless Forecasters message board and a post with TA analysis that uses planets and number analysis but also uses an analysis performed by timingsolutions.com that convolves two cycles called the Jugler and Kitchen cycles to get a cycle that looks very much like Armstrong's 8.6 year business cycle. I include the picture of the convolved cycles from that post here. Does anyone have information on what these two cycles are, why they are convolved, and how the initial conditions are determined? Seems interesting that the shape is the same, but the dates are different. However, to be fair, Armstrong's cycle could just be curve fitting (I still have problems with some of his explanations and how he picked his initial conditions, although, 2003 and 2007 where amazingly accurate.

Anywho... just curious if anyone on the mb uses this or has research it.

http://www.tsptalk.com/images/mb/081709b.gif

http://www.tsptalk.com/images/032008a.gif

Well, looking at the two plots above, we get the following:

The Juglar and Kitchen cycles are predicting a down wave in the monthly stocks until May 2012; and Armstrong's wave count was off by a year for the secondary up wave in March 2008 (it really started in March 2009), but if it's just a registration error in the date, then his down wave will take us into May 2012.

There are too many similarities between the business cycle and the stock market for me to discount it right now. Back testing of the Biz_Cyc B&H method (100% F in bear markets and 100% I in bull markets as determined by the business cycle) shows a VERY good correlation with a 1200% return since Sept 1991. This compares to a B&H in stocks (40% C, 30% S, 30% I) of 400% since Sept 1991. Avoiding the Bear hits to your portfolio is the key to good long term returns. Amazingly, the LMBF method has returned 500% since Sept 1991 which is better than a straight B&H of stocks mainly because it does avoid losses in an extended bear market.

Time will tell. Still playing it cautious for now and if Armstrong's cycle proves to be off by a year, I will not be going into equities on June 2011, but will wait until June 2012.

I may try to trade, but every time I do, I lose, so maybe not.http://www.tsptalk.com/mb/images/smilies/notrust.gif


Well, Armstrong has a low in June 2011 but that does appear to be off by about a year and Juglar/Kitchen cycles have us at a high in July 2011.... JKcycles seem to be right on target. If you believe these cycles, we are looking for a low in May 2012. Caution is advised going forward.

[malyla]

Well, the Juglar/Kitchin cycle is off by a year. After reading some comments on the blogs, I took a quick relook at these Elliott wave cycles.
Caldaro has looked at this Grand Super Cycle wave theory which is predicted to end (badly) in 2014. It's worth the look if you are retiring around that time.

http://caldaro.wordpress.com/2010/02/14/grand-super-cycle-revisited‏/

"The commodity cycle, in itself, is quite interesting. Refer to chart below, bull markets:
1933-1946
1967-1980
2001-2014
Notice there were Cycle wave peaks in the equity markets around the middle of each commodity bull market: 1937, 1973 and 2007. The first peak occurred four years after it began, the next two peaks six years after. Also notice, after the Cycle wave tops stock markets went into a bear market, and then stayed in a trading range until the commodity bull market ended. What followed after that was the extraordinary bull markets of 1949-1967 and 1982-2000. "
"In regard to currencies, during each of the last two commodity booms the USD was officially devalued. FDR did this in 1933 when he devalued the USD/Gold relationship from $20.67/oz to $35.00/oz. Then in 1971, Nixon took the USD off the gold standard completely. This suggests an official devaluation of the USD will likely occur before 2014. "

[malyla]

Just saw this on safehaven about the long wave theory (uses Kitchin waves). It's gloom and doom but another cycle theory that has a bottom in mid 2013. Just another caution warning.

[Interestingly, the short term shows an upswing likely around Sept 6-10, which is what Uptrend is predicting as well. Not sure if this from the same data, but interesting...]

http://www.safehaven.com/article/22240/prepare-for-the-global-long-wave-extinction-event


15057 (http://www.safehaven.com/article/22240/prepare-for-the-global-long-wave-extinction-event)

[PessOptimist]

Soooo. Some or one of the cycles were off by a year. Some are close. All are "worth a look". Yup, everything is "worth a look".

A system works until it doesn't, then you adjust it to show it did actually work. Then if you are smart, you try to sell it.

[malyla]

Soooo. Some or one of the cycles were off by a year. Some are close. All are "worth a look". Yup, everything is "worth a look".

A system works until it doesn't, then you adjust it to show it did actually work. Then if you are smart, you try to sell it.

True. This holds for every system out there, but all knowledge and theory adds to the predictive analysis that allows for some to take decisive actions when the time is right. It's the same thought process and gut feeling that allows you to lay down the pair of aces because you know you are beat or go all in with a suited 3, 4 which leads to a straight flush.

All systems are tools that work during one period or another. Knowledge of all the tools allows one to pick the right one for the time it will work for the market and make some money until it stops working. Ask Ebb&Flow, and Intrepid Timer plus many others about timing, systems, and the market.

Business Cycle, Jaglar, Kitchin and Long Wave theory are tools that have worked in the past but need adjustments to work now. Every system on this message board has been adjusted (Sentiment Survey had adjustments for Bear/Bull market rules, Seven Sentinels was also adjusted a few times)) and some are still being adjusted.

The point is that all knowledge is flawed at times with the market action and adjustments are made to systems or systems are abandon for other systems that are working right now.

If you find a system that works all the time I hope you will share.

[malyla]

Some new links for the future of the business cycle peaks.

The Business Cycle and the Future | Armstrong Economics (http://armstrongeconomics.com/693-2/1999-2/the-business-cycle-and-the-future/)


21568



August 2013 is the next predicted correction within the business cycle. All those retiring in 2018/2019/2020 should take heed. IMHO :)

[alevin]

21568



August 2013 is the next predicted correction within the business cycle. All those retiring in 2018/2019/2020 should take heed. IMHO :)

I've seen that timeframe (2017-2020) identified as the tail end of Secular WINTER from several different sources for some time now. lucky me-that's the timeframe I'd otherwise be looking at for retiring. as is, retirement may come sooner ready or not. If we make it to 2020, things are bound to begin to get better-according to cycle math, that is unless we've become Japan.

[malyla]

Some new links for the future of the business cycle peaks.

The Business Cycle and the Future | Armstrong Economics (http://armstrongeconomics.com/693-2/1999-2/the-business-cycle-and-the-future/)
21568
August 2013 is the next predicted correction within the business cycle. All those retiring in 2018/2019/2020 should take heed. IMHO :)

Sooooo, it's been awhile. The August 2013 to June 2014 mini-correction didn't really happen. There was a minor 3 month blip, but not the year long 10-20% correction. Maybe you could attribute this to Fed manipulation, i.e. QE, but the question is - IS THE BIZ CYCLE STRATEGY INVALID?

I will continue to look at this strategy as another data point in my trading decisions. The peak of this business cycle is scheduled to occur at the end of Sept/early Oct of this year. At that time I will set the Biz Cycle tracker to the G fund.

In time, we will see what the future holds :D

[alevin]

Sooooo, it's been awhile. The August 2013 to June 2014 mini-correction didn't really happen. There was a minor 3 month blip, but not the year long 10-20% correction. Maybe you could attribute this to Fed manipulation, i.e. QE, but the question is - IS THE BIZ CYCLE STRATEGY INVALID?

I will continue to look at this strategy as another data point in my trading decisions. The peak of this business cycle is scheduled to occur at the end of Sept/early Oct of this year. At that time I will set the Biz Cycle tracker to the G fund.

In time, we will see what the future holds :D

Malyla, it's good to see you posting again. Wow, I'd forgotten all about that biz cycle graphic, I used to look at it pretty regularly a few years ago then lost track of it. thanks for digging that back up again.

[malyla]

Sooooo, it's been awhile. The August 2013 to June 2014 mini-correction didn't really happen. There was a minor 3 month blip, but not the year long 10-20% correction. Maybe you could attribute this to Fed manipulation, i.e. QE, but the question is - IS THE BIZ CYCLE STRATEGY INVALID?

I will continue to look at this strategy as another data point in my trading decisions. The peak of this business cycle is scheduled to occur at the end of Sept/early Oct of this year. At that time I will set the Biz Cycle tracker to the G fund.

In time, we will see what the future holds :D

Staying true to this long term strategy, the turn into a downturn (Bear market) was yesterday (Oct 7). If there was a tracker BizCycle (in I fund since July 2014), I would be moving it to the G fund until late Oct/early Nov of 2016.

Personally, I'm not sure if this strategy is relevant anymore, but I will still update it from time to time in case it proves out as correct. Who knows, it may be the European (ECMWF) meteorological model of the investment world - little heralded, but mostly correct.

[Bullitt]

Major top coming in 2024 according to Armstrong charts above.

Anyone follow his work? Been 10 years since I've looked at his stuff.

[tsptalk]

Here's another cycle we've talked about before, the Benner Cycle.

The "end" of 2023 is supposed to be a time of market lows. If that was 2022, I'd be more impressed.

https://www.tsptalk.com/images/mb/2024/tsp-012724a.gif

More: How The Benner Cycle Predicts 100+ Years of Market Movement (https://www.therationalinvestor.com/blog/how-the-benner-cycle-predicts-100-years-of-market-movement)