YET ANOTHER LOOK AT
THE FOUR-YEAR CYCLE
From the Chart Store Weekly Blog for the week ending January 26, 2007
by Ron Griess
Proprietor, The Chart Store
www.thechartstore.com
March 2, 2007

Chart 1 shows the swings we have isolated for the S&P 500 Composite since 1949.  We and many others call this the "four-year" cycle.  We have gone an extra step and show some statistics when one combines the first 12 cycles into groups of four or roughly 16 year periods which some call the "long-term, secular" cycle.

Chart 1 

The following four charts show each of the complete up/down cycles from June, 1949 to October, 1966.  The up portion of the cycles for this group of 4 averaged about 185 weeks and were up 96.7% on average.  The down portion of the cycles averaged about 40 weeks and were down 22.4% on average.

Chart 2

Chart 3

Chart 4

Chart 5

The following four charts show each of the complete up/down cycles from October, 1966 to August, 1982.  The up portion of the cycles for this group of 4 was much shorter averaging about 124 weeks while being up 67.8% on average.  The down portion of the cycles was longer averaging about 83 weeks while being down 34.1% on average.  Two of the four cycles ended the cycle lower than where they started.

Chart 6

Chart 7

Chart 8

Chart 9

The following four charts show each of the complete up/down cycles from August, 1982 to October, 1998.  The up portion of the cycles for this group of 4 averaged just slightly over 200 weeks and were up 135.3% on average.  The down portion of the cycles averaged only 10 weeks and were down 22.1% on average.  This combination of four cycles exhibited the best of everything:  the up portion of the cycle was the longest and the average gross percentage change (135.3%) was the highest; the down portion was the shortest and the gross percentage change (-22.1%) was the lowest decline of the three.

Chart 10

Chart 11

Chart 12

Chart 13

We are not sure what to make of the cycle below.  It should be the start of the next "secular" cycle of four.  The first thing one notices is that the up portion of this cycle is shorter than the down portion.  In fact, of all the individual cycles we have shown, the down portion of this cycle is the longest in time (133 weeks) and the greatest in percentage loss (-50.50%).

Chart 14

Like the cycle above, we are not sure about the cycle below.  It exhibits the time characteristics of the up cycle one would associate with the "good," secular up cycle.  Currently it has run 228 weeks (through February 23), trailing only the 1982 to 1987 cycle of 263 weeks in terms of length.  Its gross percentage change of 90.15% is slightly below the average of all thirteen previous up cycles (91.98%).  Our greatest concern is that 3 previous cycles that ran over 200 weeks, 1957 to 1962 (216 weeks), 1982 to 1987 (263 weeks) and 1994 to 1998 (224 weeks) all ended with a bang and were down 29.93% on average. 

Chart 15

© 2007 Ron Griess
Editorial Archive

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