Customized cycles - Presidential cycle, Chinese Annual cycle, Jewish Annual cycle etc.
Presidential cycle is a cycle associated to President elections in United States.
How to calculate Presidential cycle? This is simple, much simpler than I expected. We can calculate Presidential cycle and then watch how this cycle works for the stock market. In USA, presidential elections take place once in four years. This is the list of the last four elections and the next election in 2016:
To calculate the cycle, we have constructed a special planet. Let's call it "Presidential cycle planet". Remember that this is a fictitious planet, you will not find it in the sky. So far this is a mathematical abstraction, and nothing more. This planet makes a full 360 degrees cycle in 4 years and ingresses zero degrees of Aries EXACTLY on USA President election days:
Thus within the first year of the Presidential cycle (from November 2012 until November 2013) our planet passes the first quadrant of Zodiac, i.e. passes Aries, Taurus and Gemini signs.
Second year of the Presidential cycle is from November 2013 until November 2014; it passes the second quadrant, i.e. Cancer, Leo and Virgo signs of Zodiac.
During the third Presidential year (from November 2014 until November 2015) it passes the third quadrant, i.e. Libra, Scorpio and Sagittarius signs of Zodiac.
And during the fourth Presidential year (from November 2015 until the next election in November 2016) it passes the fourth quadrant, i.e. Libra, Scorpio and Sagittarius signs of Zodiac and then starts the new cycle ingressing Aries.
`This small invention allows to conduct a very sophisticated research of the effect of the Presidential cycle on the stock market. Applying standard Composite module in Timing Solution to our "Presidential cycle planet", we have obtained this diagram. It shows the averaged movement of Dow Jones Industrial index while the "Presidential cycle planet" passes through different signs of Zodiac:
What does this diagram tell us? The summarized movement is shown there by red and blue bold arrows. The periods when all four diagrams here show the same directions are important; we call them "predictable zones" as there is some certainty in the price movement while our "Presidential cycle planet" passes these zones of Zodiac
First year: hard decisions. As you see, within the first year of the Presidential cycle the stock market movement is uncertain, though it tends to down movement, especially at the end of the first year of the Presidential cycle (i.e. September-November 2013). I tend to think that this is the time of hard decisions, institutional changes, regulations.
Second year: looking for new ideas. Second year shows some up trend movement in the beginning of the Presidential cycle year and some downside correction for the rest of the year. We can interpret that as the stock market looking for some new ideas for further growth.
Third year: UP - ideas in action. In the end of the second year and the beginning of the third year of the Presidential cycle we have a significant up trend movement that lasts until the end of the third Presidential year. This is the best time for the stock market. Starting from the year 1946, we had 14 up movements within that period versus 3 times of downtrend. Astrologically speaking we can specify the period when the "Presidential cycle planet" passes through 20 degrees of Virgo - 20 degrees of Scorpio as a good period for the stock market.
Forth year: dangerous period. After that the whole fourth Presidential year shows a big downtrend movement, though some small up movement is possible in the beginning of that year (i.e. fourth year of the Presidential cycle).
We can specify the period when "Presidential cycle planet" passes the interval of 20 degrees of Scorpio - 0 degrees of Aries as a dangerous period. Great Financial crisis falls on this period as well dot com crush in 2000 and the market drop in 1987. This is a kind of pre-election crash; all problems that were accumulated within the last 3 years release their bad energy within this period giving more job for the new President.
You can see how the Presidential cycle works in the time domain. It is shown on the picture below. Here we have applied committee technology to reveal the most workable patterns (marked by red/blue arrows):
Timing Solution users can download TS worksheet with these cycles (unpack the attached file into c:\TimingSolution\Work\ directory) here.
There is one more note regarding Presidential cycle - it has been formed as it is in 1940th-1950th years. Prior to that, this cycle worked in some other manner.
Chinese, Jewish, Gregorian ... Annual cycles
For some time, long enough, I could not understand how to calculate Annual cycle based on Chinese New Year or some other calendars. The problem here is: we deal here with cycles that are not equal. Let's consider the cycle that corresponds to Chinese New Year. The period of Chinese New Year changes from year to year, and the difference is significant - up to one month. Look at Chinese New Year dates for the last 15 years:
The beginning of Chinese New Year varies from January 22 till February 18, i.e. we deal here with non regular cycle. Thus we cannot apply here the methods of the classical cyclical analysis.
However, we can apply exactly the same approach that has been employed to calculate Presidential cycle. We construct a special planet, a "Chinese New Year planet" that makes full 360 degrees cycle within 12 years of Chinese calendar (one Chinese year cycle) and ingresses zero degrees of Aries exactly on Chinese New Year. Thus we can calculate the Annual cycle based on Chinese New Year applying standard composite module. We can do the same thing to any cycle related to some calendar.
Please look at the picture below. Here you can see four Annual cycles calculated for Dow data since 1950: black - based on Gregorian calendar, red - based on Chinese calendar, blue - based on Jewish calendar:
Timing Solution users can download TS worksheet with these calendars (unpack the attached file into c:\TimingSolution\Work\ directory) here.
It is interesting to compare what calendar works better for the stock market. Annual cycles based on different calendars do not give the same results. and the situation is changing all the time. However, for the last 10 years, since 2003, we have this "status quo":
Chinese Annual cycle works the best - correlation=7.13%
practically the same correlation is provided by Annual cycle based on Western (Gregorian) calendar - correlation=6.79%
Jewish Annual cycle provides correlation=2.82%
All cycles here can be considered as a pure mathematical technique, as a very simple and surprisingly effective tool to work with irregular cycles.
Instructions for Timing Solution users
You can create your own customized cycles. In order to create them follow these steps:
1) Run extended version that allows to employ the additional objects:
2) Now you have to create the list of dates with beginnings of your cycle, i.e. the moments when our artificial planets ingress zero degrees of Aries, lets call "Zero Aries Date" ZAD:
Follow "Options"=>"Customize Objects" menu:
Choose "Customize Cycle" tab and click this button there:
Type there the dates (format is MM/DD/YYYY ) for ZAD, like this:
and click button to save this file (as an example, it may be the file "my_cycle.cust_c"). Thus you have created the file with dates when your fictive planet ingresses Aries. Close editor and click this button now:
Choose my_cycle.cust_c file there. Your newly created object will be available in the list of additional objects:
Now after the calculation you can use this object in ULE, Composite etc. module:
If you use fast ephemeris, recalculate them before using. Or simply disable them.
You can define dates more precisely including time (military format):
This record means that our planet ingresses Aries on January 21, 2014 3:15pm (military time 15:15) GMT, i.e. Greenwich time zone.
And you can customize the time zone, like this:
Look at the line there: TZ=5W. It means that we use here 5 hours West time zone.
If you use the same time for all records, apply TIME tags:
Thus the record like this means January 23, 1993 3:30PM (=15:30 military) Time Zones is 5 hours West.
January 19, 2013