Here is a further quote from the January 10, 2000 Tenorio Research Year End Review:
"Further support for this scenario [of a top in early 2000] is found in Edgar Lawrence Smith's Tides in the Affairs of Men, 1939, wherein he presented the decennial pattern of stock prices. Smith found that years III, VII, and X [or some major part of them] were generally falling years with the rest generally rising. The most bullish years were V, VIII, and IX."
"Except for 1949-50 [the start of the previous KW up trend], there has been a top in the market in year IX, or in year X, usually early but no later than July (1990), and with a major bottom no later than March of X. In several X's there was no convincing low at all as the bear market lasted longer."
"Peter Eliades has [in early 2000] posted a similar observation at http://www.stockmarketcycles.com: 'Since 1920 the market in the first two market days of January of the zero [X] year has tipped us off whether the pattern would work for that year or not. If the Dow close on the first or second trading day of the New Year is higher than the highest close of the preceding month (December), then the pattern is scheduled to work, i.e. a top of some significance should be marked by the high closee of the first two trading days. only three zero[X] years..[did this not work]:1930, 1950, 1980.'"
"All of these observations [by Eliades and myself plus Nikkei 225 in 1989/90 and gold in 1990] suggest that the stock market could make a signiicant top in early January or by mid year at the latest."
There was both a January and mid-year top in 2000 with a major low in March. There were disparities of the Dow and SP500 and more dramatically so for Nasdaq. And finally in March 2003, in the middle of the standard KW window for a low, the stock market made its last low.
The reason to present this history at some length is the greater certainty it gives to what is happening now in early 2007 and during last year. Once the KW lows of commodities and rates and the stock market are in, as they are since 1999-2003, new lows will not be seen for 20-30 years. Odds are quite good that most markets will be on rising trends until the mid to late 2020's.
But when sentiment gets manic during rising trends, as it always does, there will be sizeable intermediate term bear markets such as we are now seeing in many commodities. The stock market had a major bear market from 1987 to the early 1990's, and it will have one or two more during this period up to the early to mid 2020's.
Given the history of the decennial VII years, 2007 "could" start an intermediate term bearish stock move, but the US economy shows no signs of being the trigger. The economy in the US is far more resilient than the usual naysayers expected, and much of the rest of the world is even stronger for the first time since the 1970's (or 1980's for Japan). It's possible, of course, that a China or India collapse could precipate a bear market in the US. I am not very knowledgeable about the internal markets of those countries, and I have seen very little written on current negatives, but my guess would be that a banking crisis or market corruption debacle in one of those two lands could be a bear market cause "at some point" over the next one to two decades.
A US stock market decline, if one even occurs this year, needn't be a large one. In fact, if we look at the slow-go market from early 2004 to last July, we may already have seen the decline in the form of an Elliott wave "running second wave" where the correction is sideways to mildly up, as shown on the chart below by the 1 and 2 on SP500 futures.
The intermediate term bear market in commodities could end in the latter part of this year; however, the CRB US Commodity Index made its last high only six weeks ago, even though oil and gold and copper did so months earlier. One thing is clear to me: it is far easier to time the very long term top and bottom formations of KW than to time the contra-trend corrections in the long term trend moves. I'll spend more time on this another time.
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