Joe F. Rocks!
Growth Stock Investor & Market Strategist

Cycles Summary (updated 8-19-06)

I hope to have charts for all the long term and very long term cycles at some point for the NASDAQ 100 (NDX), S & P 500 (SPX), HUI (AMEX Gold Bugs Index) and the XAU (Philadelphia Gold/Silver Index). I also hope to have historical charts with multiple very long term cycles at some point revealing that bubbles/very long term cycle highs occur about every 35 years (1897, 1929, mid 60s, 2000, for the major US averages, not for gold stocks which run counter to the major averages on a very long term cycle basis. Please see HUI, NEM, XAU, gold, and USD Trade the Cycles charts for the latest list of precious metals sector charts. There are some charts including NASDAQ 100 (NDX) charts at the Trade the Cycles web page. Cycles are discussed at the Trade the Cycles Blog (typically updated a few times each trading day).

The XAU experienced a Bear Market bottom/very long term cycle low on October 25, 2000 for example, so, the gold/silver stock market hit Bear Market lows (very long term cycle lows) at about the same time that the major averages peaked from a very long term cycle standpoint.).

The charts on this page will illustrate and backtest my cycle based system. The chart below shows the effectiveness of parabolic long term cycle sell signals. The XAU hit a long term cycle low on 5-10-04 at 76.79 versus my finetuned range of 67-72. The very long term cycles for NEM, the XAU, and HUI began in October/November 2000. They typically last 17-18 years.

Cycles are the way markets work, which is a big part of the reason why my system works so well (Bull and Bear Markets are either very long term secular cycles (10-20+ years) or shorter cyclical (3-6 years) upcycles or downcycles with well established trendlines, though one must understand the nature of cycles with upcycle rising troughs (bottoms) trendlines beginning fairly flat and becoming more parabolic/sharply rising over time(culminating in spikes)).

My system is cycle based. It's the basis and foundation of my system. I haven't seen anyone who defines/uses cycles in the manner that I do. I "bet" my friend Larry $20 that he couldn't find anyone who uses cycles in the manner that I do (it wasn't really a bet, I said I'd give him $20 if within one week he found anyone on the internet or anywhere else who uses cycles in the manner that I do. If he couldn't he didn't owe me anything.). If you know of anyone who you feel uses cycles in the manner that I do please e mail me at JoeFRocks@aol.com. Thank you.

In a Nutshell - The US major averages are in a secular Bear market that began in 2000. It should last until about about 2018 based upon past cycles as discussed later and the fact that a "mega" bubble (very long term cycle high) occurred in 1999/2000. There will be cyclical Bull Markets within the primary Bear Market such as the NASDAQ 100's Cyclical Bull Market that began 10-8-02 at 795.25.

US gold stocks are in a secular Bull Market that began October 25, 2000 at 41.61 (Bear Market/very long term cycle low for the XAU (Philadelphia Gold/Silver Index)). It should last until about 2018 based upon past cycles as discussed later and the fact that a "mega" bubble (very long term cycle high) occurred in 1999/2000.

The US economy is in a Japan style economic bust which began in 2000 that should last 15-20 years. The US major averages behavior/chart patterns have a very high correlation/look very similar (slide the Nikkei's 1989 peak over to the NASDAQ's or the S & P 500's March 2000 peak). "Eerie Nikkei-SPX Parallels" (At Zeal) shows the high degree of correlation between the S & P 500's and NASDAQ's post bubble behavior and that of the Japanese stock market that experienced a bubble in 1989 and remains at much lower levels 15 years later.

I don't have derived targets using cycle trendlines yet for all indices but I indicate where I stand.

NASDAQ 100 Very Long Term Downcycle/Secular Bear Market = Down Since March 24, 2000 Bull Market peak/very long term cycle high at 4816.35 - Secular Bear Market end date 2018ish based upon prior very long term cycles lasting about 35 years with the down portion being about 17.5 years on average (very long term cycle highs/bubbles in 1897, 1929, mid 60s, 2000). No derived target for the very long term cycle low but 400 is an educated guess.

NASDAQ 100 Long Term Cycle = Up since long term cycle low at 1301.93 on 8-13-04.

S & P 500 Very Long Term Downcycle/Secular Bear Market = Down Since March 24, 2000 Bull Market peak/very long term cycle high at 1552.87 - Secular Bear Market end date 2018ish. No derived target for the very long term cycle low.

S & P 500 Long Term Cycle  = Up since 8-13-04 long term cycle low at 1060.72. SPX is working it's way up to the very long term downcycle trendline.

XAU (Philadelphia Gold/Silver Index) Very Long Term Upcycle/Secular Bull Market = Began October 25, 2000 at 41.61 Bear Market/very long term cycle low. No derived target for the very long term cycle high. Bull Market/very long term upcycle should last until about 2018 with of course major corrections/downcycles along the way.

XAU (Philadelphia Gold/Silver Index) Long Term Cycle (heading down) = Long term cycle high occurred at 171.71 on 5-11-06 that was probably also a Wave 1 Cyclical Bull Market Cycle High, so, the Secular Bull Market that began on October 25, 2000 at 41.61 is probably in an 18 monthish Wave 2 Cyclical Bear Market. Previous long term cycle began May 10, 2004 at 76.79 long term cycle low.

HUI (AMEX Gold Bugs Index) Very Long Term Upcycle/Secular Bull Market = Began on November 15, 2000 at 35.31 Bear Market/very long term cycle low. No derived target for the very long term cycle high. Bull Market/very long term upcycle should last until about 2018 with of course major corrections/downcycles along the way.

HUI (AMEX Gold Bugs Index) Long Term Cycle (heading down) = Long term cycle high occurred at 401.69 on 5-11-06 that was probably also a Wave 1 Cyclical Bull Market Cycle High, so, the Secular Bull Market that began on November 15, 2000 at 35.31 is probably in an 18 monthish Wave 2 Cyclical Bear Market. Previous long term cycle began May 10, 2004 at 163.81 long term cycle low.

With my cycle based system when a cycle trendline fails a decline to the next longer cycle trendline is expected/likely based upon extensive backtesting/past behavior, though one must understand the nature of cycles. The next longer cycle's trendline could turn up or down based upon wether it's in an uptrend or downtrend (cycles are connected parabolas basically). In other words I don't have to be a "guru" making educated guesses which is impossible to do consistently with market timing. One MUST have a proven backtested system to CONSISTENTLY time the market.

Most of the analysts/market timers (the vast majority) don't have a BASIS for their predictions (educated guesses in most cases). They don't have a proven backtested system in almost all cases.

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