The 4 Year Cycle

I received a question from a follower. The questions is this;

“Many people who follow both politics, the technical indicators and astrology are suggesting that we could be in for a very serious correction, or even a crash, between now and next May, possibly even before the end of the year. Do you share this view? If so, when do you think the most likely time for such a decline to begin would be?”

To answer this question I would first say that when everyone is looking for a crash in the same time frame it won’t happen, at least in that time frame.

I follow the 4 year cycle. It last hit a trough in early March 2009. The 4 year cycle is typically composed of either 2 or 3 sub-cycles. This 4 year cycle appears to be on a 3 year sub-cycle type.

The following chart shows the current 4 year and the typical 15.5 month sub-cycles. It should be noted although the first 2 cycles are almost exactly 15.5 months the 3^rd cycle of the 4 year cycle typically is the most distorted and can come in either early or late. Note, the 4 year cycle trough is typically quite deep. The red vertical lines are 15.5 months which brings the last 15.5 month to Jan 7, 2013. As stated above the last cycle will be the most distorted. A good rule of thumb would be the 4 year cycle should fall within 1/6 of the cycle length which would be July 2012 to July Aug 2013. I will be looking for Astrological events to try and narrow this date down but a good start would be the exact dates for the Uranus / Pluto square and eclipse dates. November 13, 2012 has a strong total Solar eclipse and is a candidate. I would say a candidate because we need to see the price action leading up to that date.

 There is another cycle worth noting, that is the year ending in "2" cycle for each decade. This is often called the 2nd Year in a decade cycle but it is of course the third year. From my December 11, 2011 post following are some previous years which had significant lows.

2002 July

1992 Dec '91

1982 Aug

1972 Nov '71

1962 June

1952 May

1942 April

1932 July

There is also an approximate 12.5 year cycle for lows or the start of significant down turns.

2000

1987

etc.

If I had to pick a time for a crash right now I would be looking at mid Sept or the period around November 13. We'll try and identify the 4 year low, which could be a crash as cycles, price action and Astrology develop.