Registered User
Joined: 12/19/2004
Posts: 415
|
The note of 14 Aug 09 got me to thinking and since I have a database of DJIA closing back to 1928, I thought I would put in a little time and number crunching.
DW:
Sir Ten-Year Cycle brings us a set of observations that are certainly interesting and that could be quite useful. Of course, we all have to discover that for ourselves. You should check the Dow Jones Industrial Average for at least five decades .....
I choose two four decade comparisons since I have 80 years of data. But all the data is visible for you to check. My data began in 1928, so I disregarded 1929 in the comparisons.
Sir Ten Year Cycle:
To follow up on Sir DataMiner's article on cycles, I observe something that has remained uncannily true in my lifetime. It is the behavior of the 10-year cycle.
The behavior can be approximated to a form of the 3 wave cycle model in both directions, (waves 1 & 3 being with the direction of the primary trend, wave 2 being the correction to that), I note them in brackets after each year's comment. With a few months variation, sometimes it goes like this:
YEAR ending in...
0 - Deeply depressing mood disappointments failing economy & businesses, unemployment, etc. (Wave 3 down.)
|
Trade Date
|
Close
|
Prior Close
|
Change
|
Percent Change
|
30's-60's Period Range
|
70's-20's Period Range
|
|
12/31/1930
|
164.58
|
248.48
|
-83.9
|
-33.77%
|
|
|
|
12/31/1940
|
131.13
|
149.99
|
-18.86
|
-12.57%
|
|
|
|
12/29/1950
|
235.42
|
200.52
|
34.9
|
17.40%
|
|
|
|
12/30/1960
|
615.89
|
679.36
|
-63.47
|
-9.34%
|
|
|
|
12/31/1970
|
838.92
|
800.36
|
38.56
|
4.82%
|
|
|
|
12/31/1980
|
963.99
|
838.74
|
125.25
|
14.93%
|
|
|
|
12/31/1990
|
2633.66
|
2753.2
|
-119.54
|
-4.34%
|
3 Declines
|
2 Declines
|
|
12/29/2000
|
10787.99
|
11497.12
|
-709.13
|
-6.17%
|
1 Advances
|
2 Advances
|
|
|
|
|
|
|
-34%-+17%
|
-6%-+15%
|
I don't see a down bias although the first period had more significant declines.
1 - More of the same but worse. (Wave 3 down.)
|
Trade Date
|
Close
|
Prior Close
|
Change
|
Percent Change
|
30's-60's Period Range
|
70's-20's Period Range
|
|
12/31/1931
|
77.90
|
164.58
|
-86.68
|
-52.67%
|
|
|
|
12/31/1941
|
110.96
|
131.13
|
-20.17
|
-15.38%
|
|
|
|
12/31/1951
|
269.23
|
235.42
|
33.81
|
14.36%
|
|
|
|
12/29/1961
|
731.14
|
615.89
|
115.25
|
18.71%
|
|
|
|
12/31/1971
|
890.20
|
838.92
|
51.28
|
6.11%
|
|
|
|
12/31/1981
|
875.00
|
963.99
|
-88.99
|
-9.23%
|
|
|
|
12/31/1991
|
3168.83
|
2633.66
|
535.17
|
20.32%
|
2 Declines
|
2 Declines
|
|
12/31/2001
|
10021.57
|
10787.99
|
-766.42
|
-7.10%
|
2 Advances
|
2 Advances
|
|
|
|
|
|
|
-53%-+19%
|
-9%-+20%
|
I don't see a down bias although the first period had more significant declines.
2 - Amidst a far worse mood, the funds actually bottom out as do prices. However people are badly burned out by the doom & gloom. Few spot it & even fewer trust it. This is the actual market bottom in many assets amid a crisis. (Wave 3 down, turning into Wave 1 up.)
|
Trade Date
|
Close
|
Prior Close
|
Change
|
Percent Change
|
30's-60's Period Range
|
70's-20's Period Range
|
|
12/30/1932
|
60.26
|
77.9
|
-17.64
|
-22.64%
|
|
|
|
12/31/1942
|
119.40
|
110.96
|
8.44
|
7.61%
|
|
|
|
12/31/1952
|
291.90
|
269.23
|
22.67
|
8.42%
|
|
|
|
12/31/1962
|
652.10
|
731.14
|
-79.04
|
-10.81%
|
|
|
|
12/29/1972
|
1020.02
|
890.2
|
129.82
|
14.58%
|
|
|
|
12/31/1982
|
1046.54
|
875
|
171.54
|
19.60%
|
|
|
|
12/31/1992
|
3301.11
|
3168.83
|
132.28
|
4.17%
|
2 Declines
|
1 Declines
|
|
12/31/2002
|
8341.63
|
10021.57
|
-1679.94
|
-16.76%
|
2 Advances
|
3 Advances
|
|
|
|
|
|
|
-23%-+8%
|
-17%-+20%
|
I do see an up bias with some down years.
3 - Quietly recovering. Still lots of distrust & very little "feel-good" around. (Wave 1 up.)
|
Trade Date
|
Close
|
Prior Close
|
Change
|
Percent Change
|
30's-60's Period Range
|
70's-20's Period Range
|
|
12/29/1933
|
98.67
|
60.26
|
38.41
|
63.74%
|
|
|
|
12/31/1943
|
135.89
|
119.4
|
16.49
|
13.81%
|
|
|
|
12/31/1953
|
280.90
|
291.9
|
-11
|
-3.77%
|
|
|
|
12/31/1963
|
762.95
|
652.1
|
110.85
|
17.00%
|
|
|
|
12/31/1973
|
850.86
|
1020.02
|
-169.16
|
-16.58%
|
|
|
|
12/30/1983
|
1258.64
|
1046.54
|
212.1
|
20.27%
|
|
|
|
12/31/1993
|
3754.09
|
3301.11
|
452.98
|
13.72%
|
1 Declines
|
1 Declines
|
|
12/31/2003
|
10453.92
|
8341.63
|
2112.29
|
25.32%
|
3 Advances
|
3 Advances
|
|
|
|
|
|
|
-4%-+64%
|
-17%-+25%
|
An advancing bias for sure.
4 - Have things really been going UP for the past 1 to 2 years? Quick, buy something! (Wave 1 up.)
|
Trade Date
|
Close
|
Prior Close
|
Change
|
Percent Change
|
30's-60's Period Range
|
70's-20's Period Range
|
|
12/31/1934
|
104.04
|
98.67
|
5.37
|
5.44%
|
|
|
|
12/29/1944
|
151.93
|
135.89
|
16.04
|
11.80%
|
|
|
|
12/31/1954
|
404.39
|
280.9
|
123.49
|
43.96%
|
|
|
|
12/31/1964
|
874.13
|
762.95
|
111.18
|
14.57%
|
|
|
|
12/31/1974
|
616.24
|
850.86
|
-234.62
|
-27.57%
|
|
|
|
12/31/1984
|
1211.57
|
1258.64
|
-47.07
|
-3.74%
|
|
|
|
12/30/1994
|
3834.44
|
3754.09
|
80.35
|
2.14%
|
0 Declines
|
2 Declines
|
|
12/31/2004
|
10783.01
|
10453.92
|
329.09
|
3.15%
|
4 Advances
|
2 Advances
|
|
|
|
|
|
|
5%-+44%
|
-28%-+3%
|
An up bias in the early period with a unchanged to slightly downward bias in the later period. If the 70 data were removed this would be an advancing group also.
5 - Amid a modest dip & sometimes mild panic that turns into consolidation. (Wave 2 correction [sideways / up] gives way to the strongest wave--wave 3 up.)
|
Trade Date
|
Close
|
Prior Close
|
Change
|
Percent Change
|
30's-60's Period Range
|
70's-20's Period Range
|
|
12/31/1935
|
144.13
|
104.04
|
40.09
|
38.53%
|
|
|
|
12/31/1945
|
192.91
|
151.93
|
40.98
|
26.97%
|
|
|
|
12/30/1955
|
488.40
|
404.39
|
84.01
|
20.77%
|
|
|
|
12/31/1965
|
969.26
|
874.13
|
95.13
|
10.88%
|
|
|
|
12/31/1975
|
852.41
|
616.24
|
236.17
|
38.32%
|
|
|
|
12/31/1985
|
1546.67
|
1211.57
|
335.1
|
27.66%
|
|
|
|
12/29/1995
|
5117.12
|
3834.44
|
1282.68
|
33.45%
|
0 Declines
|
1 Declines
|
|
12/30/2005
|
10717.50
|
10783.01
|
-65.51
|
-0.61%
|
4 Advances
|
3 Advances
|
|
|
|
|
|
|
11%-+39%
|
-1%-+38%
|
Nice upward bias with only one year slightly negative.
6 - Now things are really getting hot. Prices are rising rapidly. The media is excited, etc. However, the astute observer sees that, under the hood, cracks are beginning to appear. Tops are being built, etc. (Wave 3 up.)
|
Trade Date
|
Close
|
Prior Close
|
Change
|
Percent Change
|
30's-60's Period Range
|
70's-20's Period Range
|
|
12/31/1936
|
179.90
|
144.13
|
35.77
|
24.82%
|
|
|
|
12/31/1946
|
177.20
|
192.91
|
-15.71
|
-8.14%
|
|
|
|
12/31/1956
|
499.47
|
488.4
|
11.07
|
2.27%
|
|
|
|
12/30/1966
|
785.69
|
969.26
|
-183.57
|
-18.94%
|
|
|
|
12/31/1976
|
1004.65
|
852.41
|
152.24
|
17.86%
|
|
|
|
12/31/1986
|
1895.95
|
1546.67
|
349.28
|
22.58%
|
|
|
|
12/31/1996
|
6448.27
|
5117.12
|
1331.15
|
26.01%
|
2 Declines
|
0 Declines
|
|
12/29/2006
|
12463.15
|
10717.5
|
1745.65
|
16.29%
|
2 Advances
|
4 Advances
|
|
|
|
|
|
|
-19%-+25%
|
16%-+26%
|
More advancing years and the later period had all advancers. Since this work doesn't look at individual stocks, one has to look at patterns that developed during the year.
7 - The public thinks things are never going down again, but in mid-year markets top out &, towards the end, give a violent warning of their wrath to come. (Wave 3 up gives way to wave 1 down.)
|
Trade Date
|
Close
|
Prior Close
|
Change
|
Percent Change
|
30's-60's Period Range
|
70's-20's Period Range
|
|
12/31/1937
|
120.85
|
179.9
|
-59.05
|
-32.82%
|
|
|
|
12/31/1947
|
181.16
|
177.2
|
3.96
|
2.23%
|
|
|
|
12/31/1957
|
435.69
|
499.47
|
-63.78
|
-12.77%
|
|
|
|
12/29/1967
|
905.11
|
785.69
|
119.42
|
15.20%
|
|
|
|
12/30/1977
|
831.17
|
1004.65
|
-173.48
|
-17.27%
|
|
|
|
12/31/1987
|
1938.83
|
1895.95
|
42.88
|
2.26%
|
|
|
|
12/31/1997
|
7908.25
|
6448.27
|
1459.98
|
22.64%
|
2 Declines
|
1 Declines
|
|
12/31/2007
|
13264.82
|
12463.15
|
801.67
|
6.43%
|
2 Advances
|
3 Advances
|
|
|
|
|
|
|
-33%-+15%
|
-17%-+23%
|
Statistically neutral to upward, but with recent memory (87 and 2007) markets peaked mid year, 97 rose until mid year and then traded down and up in two cycles.
8 - Armageddon! (Wave 1 down.)
|
Trade Date
|
Close
|
Prior Close
|
Change
|
Percent Change
|
30's-60's Period Range
|
70's-20's Period Range
|
|
12/31/1928
|
300.00
|
|
|
|
|
|
|
12/30/1938
|
154.36
|
120.85
|
33.51
|
27.73%
|
|
|
|
12/31/1948
|
177.30
|
181.16
|
-3.86
|
-2.13%
|
|
|
|
12/31/1958
|
583.65
|
435.69
|
147.96
|
33.96%
|
|
|
|
12/31/1968
|
943.75
|
905.11
|
38.64
|
4.27%
|
|
|
|
12/29/1978
|
805.01
|
831.17
|
-26.16
|
-3.15%
|
|
|
|
12/30/1988
|
2168.57
|
1938.83
|
229.74
|
11.85%
|
|
|
|
12/31/1998
|
9181.43
|
7908.25
|
1273.18
|
16.10%
|
1 Declines
|
2 Declines
|
|
12/31/2008
|
8776.39
|
13264.82
|
-4488.43
|
-33.84%
|
3 Advances
|
2 Advances
|
|
|
|
|
|
|
-2%-+34%
|
-34%-+16%
|
This doesn't look like Armageddon to me, if you take out 2008 this year has an upward bias..
9 - Huge relief bounce that eventually rolls over, setting up for the disappointment of a long winter of years ending in 0, 1 & 2. Media is excited, disaster has been averted, depression / recession, etc. is now over. Buy! Buy! Buy! Supposedly this is the year that markets and the economy are finally coming back. Or is it? (Huge wave 2 correction, turning into wave 3 down. Bigger trend still firmly down.)
|
Trade Date
|
Close
|
Prior Close
|
Change
|
Percent Change
|
30's-60's Period Range
|
70's-20's Period Range
|
|
12/31/1929
|
248.48
|
300
|
-51.52
|
-17.17%
|
|
|
|
12/29/1939
|
149.99
|
154.36
|
-4.37
|
-2.83%
|
|
|
|
12/30/1949
|
200.52
|
177.3
|
23.22
|
13.10%
|
|
|
|
12/31/1959
|
679.36
|
583.65
|
95.71
|
16.40%
|
|
|
|
12/31/1969
|
800.36
|
943.75
|
-143.39
|
-15.19%
|
|
|
|
12/31/1979
|
838.74
|
805.01
|
33.73
|
4.19%
|
|
|
|
12/29/1989
|
2753.20
|
2168.57
|
584.63
|
26.96%
|
|
|
|
12/31/1999
|
11497.12
|
9181.43
|
2315.69
|
25.22%
|
2 Declines
|
0 Declines ?
|
|
8/14/2009
|
9321.40
|
8776.39
|
545.01
|
6.21%
|
2 Advances
|
4 Advances ?
|
|
|
|
|
|
|
-15%-+16%
|
4%-+27%
|
I didn't check whether there was a relief rally during the year, but excluding this year the Dow had an upward bias.
I'm NOT picking at the Sir Ten Year Cycle's observations, just giving the year end numbers allowing you to formulate your own conclusion to the theory.
|
Registered User
Joined: 1/28/2005
Posts: 6,049
|
From: Don't Sell Stocks on Monday by Yale Hirsch
Data from 1885 to 1985
Up vs. Down Years
YEAR 1) 7U, 3D
YEAR 2) 8U, 2D
YEAR 3) 4U, 6D
YEAR 4) 6U, 4D
YEAR 5) 11U, 0D
YEAR 6) 7U, 3D
YEAR 7) 3U,7D
YEAR 8) 8U, 2D
YEAR 9) 8U, 2D
YEAR 0) 3U, 7D
Sum of the returns for the years:
YEAR 1) 25%
YEAR 2) 32%
YEAR 3) 27%
YEAR 4) 64%
YEAR 5) 254%
YEAR 6) 47%
YEAR 7) -74%
YEAR 8) 164%
YEAR 9) 41%
YEAR 0) -36%
Doesn't look like it bodes well for 2010?
The good news is 2015 is in our future.
Thanks
diceman
|
Registered User
Joined: 12/19/2004
Posts: 415
|
It looks like the earlier days were more negative for the 0 years. Thanks for the extension of the data. Still it doesn't appear that Sir Ten Year Cycle observations don't all hold over a longer time frame.
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