Wednesday, March 15, 2017

17 year business cycle

In a previous post, I theorized that there might be an 11 year cycle.  Now I am thinking about a 17 year cycle.  The Dow hit a high of 11,722 on 1/14/2000, and this cycle hit a high of 21,115 on 3/1/2017.   

Previous cycles had turning points in 1932 (the depths of the great depression), 1949, 1966, and 1983.  There wasn't a recession in 1966, but it reached a high of 981 on 1/5/1966.  The first time the Dow broke 1,100 was on 2/24/1983, so the stock market went sideways for 17 years from 1966 to 1983 before beginning a great boom from 1983 to 2000.

The 17 year cycle is about double Martin Armstrong's pi cycles of 8.6 years.

If the 17 year cycle is correct (and it probably isn't), then we can the Fed to raise rates 3 more times this business cycle, a recession starting in March 2018, and a stock market crash in September 2018.

Armstrong sees a cycle of 3,141 days, so two cycles have 6,282 days.  If you start with 1/14/2000 and add 6,282 days, you get to 3/26/17.  The actual high in 2017 was on 3/1/2017, 25 days early.  That's pretty close.

A recession began in March 2001 (call it March 1 for our purposes).  6,282 days from then is May 12, 2018, or really on May 1, 2018.

Other parallels between the year 2000 and the year 2017 is the feeling of something totally new.  In 2000, it was a new millenium.  It 2017, it was the election of Trump.

On May 16, 2000 the Fed raised interest rates to 6.5%.  They have never been that high since.  6,282 days from then is about July 27, 2017.  The next time the Fed meets is in June.  So I am predicting that they will raise rates at that meeting to 1.00% and that will be the last time they raise rates.

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