Trader’s Narrative

You wake up, you sleep. The sun rises, it sets. The seasons change. Cycles are part of life.

Since the stock market is just another human activity, it too has patterns and cycles. There are many different ones spanning the short term (daily ebb and flow of intra-day trading) to the very very long term (kondratiev or sometimes: Kondratieff waves). Previously I mentioned the four year cycle and showed a long term graph of its uncanny timing ability.

Since we are starting a new year, I wanted to take a look at the 10 year cycle. The graph below shows the relative performance of the stock market in the different years of the decade.

Years ending with 1 and 2 have the lowest returns; years ending with and 8 or a 9, the highest. I get the feeling we are divining the entrails of the market (with about as much scientific rigor) but from this historical view, 2008 has the wind to its back.

Here’s to another great profitable year!