Friday, September 23, 2016

2016.09.23 DJIA Cycle Model Chart

2016.09.23 DJIA Cycle Model Chart

















The rightward phase shift continues, though still suggesting lower prices for the average.  This is not surprising given the model uses data going back to 1896. There are a few multidecadal cycles for which a year or two of variance is well within error. Summing up: the chance for a price reversion is high, but so is the chance of QE 4,5 and 6! My biased view is that the model shows the kinds of cyclical pressures that the Fed is avoiding with its countercyclical monetary policies, with much success as measured by the DJIA price, for now.

2 comments:

Diego said...

Thank you for the previous update on the Nasdaq and this one. It is amazing how much fundamentals and price differ, "for now"! ;)
Best regards, Diego

beetlejuice said...

I doubt the Fed have been able to subjugate the natural order of cycles, perhaps just postpone it for a short while. The longer they are able to postpone it however, the worse the eventual decline will be.
That is what happens when you mess with the natural order of cycles.