The term Cycle is defined as a repeating, periodic disturbance which moves through a medium from one location to another. Stock market movement can be imagined as a series of complex waveforms.
The term Cycle is defined as a repeating, periodicdisturbance which moves through a medium from one location to another. Stock market movement can be imagined as a series of complex waveforms, where market movement is actually a summed total of the individual oscillations.
Many stock-related cycles have been identified, from very short term to decades in length. Some of these cycles are listed below.
- Kondratiev Cycle: 50-60 year cycle of expansion/stagnation/recession. Note: the most recent cycle appears to be stretched out by monetary policy.
- Presidential Cycle: 4 year cycle based on the U.S. presidential term.
- Yearly (Seasonal) Cycles:
- Halloween Indicator: Sell in May and Go away
- Santa Claus Rally: End-of-Year Rally
- January Effect: Small Cap performance in January
- End of Month Effect: Stocks tend to exhibit end-of-month strength.
- Day of Week: First day of week tends to be bullish; Friday tends to be bearish