News Archives - The Foundation for the Study of Cycles

By Andrew Pancholi, FSC Board Member
FSC Board Member and Creator of Market Timing Report

In financial history, few events illustrate the power of market cycles as vividly as the Hunt brothers’ attempt to corner the silver market in the late 1970s. As we approach the 45th anniversary of this dramatic episode, it serves as a compelling study of how financial patterns repeat with remarkable precision – particularly the importance of the 45-year time cycle. This cycle is not just a historical curiosity; it is a crucial tool for anticipating future market behavior.

Are we about to see some major moves in precious metals?

A Hedge Against Uncertainty

The Hunt brothers – Nelson Bunker, William Herbert, and Lamar—were Texas oil heirs who viewed silver as a hedge against inflation and monetary instability. Following President Nixon’s abandonment of the gold standard in 1971, they distrusted paper currency and saw silver as a tangible store of wealth. With private gold ownership restricted in the U.S., they began accumulating vast amounts of silver, not just as a speculative asset but as a safeguard against economic turmoil.

Cornering the Market

Starting in 1973, the Hunts strategically acquired physical silver while also purchasing enormous futures contracts. Unlike most traders who settled contracts in cash, they demanded physical delivery, reducing available supply. They further leveraged their holdings as collateral, forming alliances with Middle Eastern investors to extend their reach. By 1979, silver prices had surged from $6 to nearly $50 per ounce, a meteoric 700% increase. The Hunt brothers controlled roughly 100 million ounces of physical silver and another 90 million ounces in futures, effectively commanding one-third to two-thirds of the global supply.

Regulatory Intervention and Collapse

The sheer scale of their holdings alarmed regulators. On January 7, 1980, COMEX introduced “Silver Rule 7,” restricting leveraged silver purchases, while the Federal Reserve pressured banks to curb speculative lending. With liquidity drying up, silver prices began to fall. The Hunts struggled to meet margin calls, culminating in the infamous “Silver Thursday” on March 27, 1980, when silver prices plummeted from nearly $50 to $10.80 per ounce. Unable to cover their obligations, the Hunts defaulted on a $100 million margin call, triggering a market-wide collapse.

The Aftermath and Market Cycles

The fallout was catastrophic. The Hunt brothers lost over $1 billion, eventually declaring bankruptcy. In 1988, they were found guilty of attempting to corner the market and ordered to pay $134 million in damages. Their trading privileges were revoked, and regulatory changes were implemented to prevent similar market manipulations in the future. Silver remained depressed for years, underscoring the dangers of excessive leverage and unchecked speculation.

This episode highlights the cyclical nature of financial markets, particularly the 45-year cycle that continues to reveal repeating themes in market behavior. The dramatic boom-and-bust cycle of silver in 1980 mirrors similar events occurring at regular intervals. Recognizing the significance of these cycles allows investors to anticipate potential inflection points with greater accuracy. As we revisit the Hunt brothers' story exactly 45 years later, the resonance is unmistakable. It is a powerful reminder that markets may evolve, but human behavior – and the cycles it produces – remains consistent. Understanding and aligning with these time-tested cycles offers a strategic advantage to modern investors navigating today’s complex markets.

Silver Futures

Andrew Pancholi
FSC Board Member

Andrew Pancholi is the creator of the Market Timing Report and is co-author of the bestseller Zero Hour and The Lost Coffee Courses of W.D. Gann. In addition to being a regular contributor to FXStreet and Traders World, he has appeared on numerous media stations, including Real Vision. His published works forewarned people of the forthcoming 2020 crash and precisely timed the recent market top. He foretold of the 2000 equity highs, the 2007-08 global financial crisis, and the commodity booms of 2008 and 2010. He has extensive knowledge of the works of W.D. Gann, R.N. Elliott, J.M. Hurst, and numerous other forecasting techniques. Pancholi also specializes in geopolitical forecasting, the long-range forecasting of space weather, solar flares, and CMEs, as well as earthquake prediction. He consults with some of the largest banks and institutions in the world and advises government bodies. Pancholi is based in the U.K.

NOTE: This article is intended exclusively to provide information and education to help individuals better understand cycles and the markets. However, this information is not to be construed as professional advice as to the buying and selling of securities or other investment instruments. In no event does the host express any opinion with respect to, or make recommendations regarding, the purchase or sale of any particular security or other investment instrument. There is a very high degree of risk involved in trading securities, and buying or selling decisions are solely within the personal discretion of each individual.

As starts go, this year has been unsurprisingly weak, with SPX still capped near its all-time high. What next? The January barometer (JB) seasonality pattern for 2025 will be either of two scenarios: best-case, an extended linear uptrend (+/+), or worst, a volatile cycle and negative surprise into year-end (+/-), as illustrated within the JB scenario matrix in my previous FSC vlog.

However, in Asia, where I used to live, a collective population of nearly 2 billion recently celebrated their New Year by saying “gōngxǐ fācái,” an expression that wishes “health and prosperity.” One thematic question to ask is what will the 2025 (Wood) Snake Year likely bring? For those less familiar with this ancient timing system, also known as the Lunar New Year, it begins on the second new Moon after the winter solstice. Moreover, it is a lunisolar calendar, based on astronomical observations of the Sun’s position in the sky and the Moon’s phases.

Traditional Chinese zodiac use archetypal animal symbols to describe the qualitative nature of each lunar year cycle of 12 years. A matrix of five elements is further overlayed; (Earth, Wood, Water, Fire & Metal), so that each year only rotates once in a lifetime, every 60 years – also known as the Chinese sexagenary cycle.

Last year I wrote about the 21.5% jump in the SPX associated with the “Wood Dragon.” Figure 1 illustrates the updated heatmap of U.S. equity market returns over the last 100 years. Empirical analysis shows the highest returns in the Year of the Rabbit, with third highest attributed to Dragon and lowest to the Horse (Figure 2).

Find more in-depth academic studies here. The last Wood Snake year appeared in 1965, when there was an 11% gain in SPX. However, outlier negative returns still happen, typically across the metal element, during 2001 and 1941. Another example is in earth element during 1929. See CLSA analysis for recent examples.

Of most interest is the latter period remembered for what led to the Wall Street crash. This merely serves as a historical risk analogue that overlays with eastern cyclical matrix. It implies caution and potential event risk ahead. This remains in line with my view, warning of a major peak in equities, weighed by triple whammy of headwinds, notably momentum extremes, rotation fragility, and cycle asymmetric risk, particularly into the month of March.

Long term our Kondratieff wave analysis suggests an inflation resurgence into H2 2025 that should offer further disruption. Naysayers of this eastern calendar system should temporarily suspend their disbelief and simply reflect on these analogues as potential risk scenarios, especially given that SPX continues to signal a trend exhaustion (wave 5) that is still in play (Figure 3). On a final note, in Chinese feng shui, the Snake signifies a year of renewal and agility. Although this also requires a robust and adaptive strategy. “Gōngxǐ fācái!”

Thank you to all FSC Members for all your kind feedback and insightful questions on our FSC blog series. I welcome more interaction at ron.william@cycles.org

Ron William, CFTe, MSTA

LinkedIn, Twitter

Ron William, CFTe, MSTA, is a market strategist and educator/mentor with more than 20 years of experience working for leading macro research and institutional firms, producing tactical research and trading strategies. He specializes in global, multi-asset, top-down framework, grounded in behavioural technical analysis, driven by cycles based on the "Roadmap" signature model of veteran market technician Robin Griffiths, published in his book “Mapping the Markets.”

Ron also applies a "market & mind" approach at IntensiChi, using the latest techniques in behavioral-risk models and neuroscience sourced from expert groups. He further supplements with mentoring/coaching, trained by the International Coaching Federation (ICF), and teaches a regulatory approved masterclass in Applied Behavioral Science, with investment, private banks and CFA Societies.

Ron's primary work, as part of his current institutional market advisory firm (RWA), acquired global industry recognition as winner of “Best FX Research” in 2020. Financial media programs and industry publications regularly feature his market insights, including “Is the big cycle about to turn?”, predicting the 2020 crash and alerting the “Minsky paradigm” of 2020 H2-2022.

Driven by high-integrity education, Ron serves as part of the education committee of the International Federation of Technical Analysts (IFTA), Development Director at the Foundation of the Study of Cycles (FSC), Head of SAMT’s Geneva Chapter, and an honorary member of ESTA. He is also a visiting lecturer at universities, active guest speaker for the CFA, CAIA and CISI, and senior teacher at colleges offering an accredited diploma in trading and investing.

NOTE: This article is intended exclusively to provide information and education to help individuals better understand cycles and the markets. However, this information is not to be construed as professional advice as to the buying and selling of securities or other investment instruments. In no event does the host express any opinion with respect to, or make recommendations regarding, the purchase or sale of any particular security or other investment instrument. There is a very high degree of risk involved in trading securities, and buying or selling decisions are solely within the personal discretion of each individual.

By Bill Sarubbi, FSC Board Member

cyclesresearch.com

The S&P and NASDAQ indices, both weighted and unweighted, have broken out of consolidations. The cycles for both indices point up, so higher quotes are likely. The prior resistance is now support, and price is sitting just above these support areas. This establishes an attractive reward/risk ratio in each market. Newsletter writers have gone from bullish to very bearish quickly. And now the AAII survey has more bears than any time in the last year.

In the summer of 2024, I noted that the stock market was likely to move higher. However, the big tech leaders were seen to be too extended and due for a correction. If the market was to move higher and the tech leaders were to correct, then other stocks would have to start outperforming, which has been the case. Let us analyze the prospects for these stocks through the use of cycles.

The relative strength of the equally weighted NASDAQ versus the S&P 500 turned up in late December and remains strong. This indicates that the average stock in the NDX 100 is stronger than the cap-weighted S&P 500. The big-cap tech stocks have been lagging while the smaller weights in the index have been rising. The result: Many more stocks are rising, but the equities that have the greatest influence on the indices have lagged. This is in sharp contrast to the situation in 2024 in which only 25% of the stocks outperformed the S&P 500.

The relative strength screen shows that within the NASDAQ 100, the big 8 tech stocks are ranked from number 6 (Netflix) to number 75 (Microsoft). Here are the stocks in relative strength order with the cycles' recommendations in parentheses:

Netflix (hold)
Meta Platforms (sell)
Tesla (buy)
NVIDIA (sell)
Amazon (sell)
Apple (hold)
Google (sell)
Microsoft (cycle low in March)

This monthly cycle explains the buy signal on Tesla:

Tesla Monthly Cycle

Here is another picture that explains the sell opinion on NVIDIA:

NVIDIA Monthly Cycle

The top 5 NASDAQ current relative performers are:

Palantir
Super Micro Computer
Axon
Atlassian
DoorDash

From these new leaders, here are the stocks that can be added to portfolios now.

Super Micro came down hard, bottomed, and is now giving longer-term buy signals, supported by rising cycles.

Super Micro Daily, Weekly, and Monthly

Atlassian features technical strength and a rising monthly cycle.

Atlassian Monthly Cycle

Bill Sarubbi Bio
cyclesresearch.com

Bill Sarubbi obtained his BS in 1971 and his MBA in 1972 from NYU, becoming a member of the Foundation for the Study of Cycles in the same year. He trained as a therapist under the direction of Dr. John Pierrakos in New York for nine years. From 1972 to 1990 he worked on the buy and sell sides of Wall Street as an analyst with the Value Line Investment Survey, as an institutional broker, and as a technical strategist with PaineWebber. From 1990 to 2004 Sarubbi was with the Abu Dhabi Investment Authority, where he was a technology fund manager, North American strategist, and member of the currency hedging committee. Since 2004 he has been operating his own money management and consulting service. In the course of his work, he developed unique market analysis software. Sarubbi is a Forbes contributor and is active in groups that focus on the future and on cycles, including the Kenos Circle, a Vienna-based group of futurists. Sarubbi is based in Vienna.

By Edward R. Dewey
FSC Founder

From the Archives: This article is reposted as it was published in 1970 in the Journal of Interdisciplinary Cycle Research - Volume 1.

Probably more than a thousand scientists, the world over, have studied rhythmic behaviour of one sort or another. They have reported over 500 different sorts of phenomena which have been alleged to fluctuate rhythmically, i.e., in cycles or waves of reasonable regularity. Rhythmic cycles characterize the abundance of animals, the variations of weather, the recurrence of diseases and epidemics, the repetition of basic physiological phenomena, the ups and downs of business, the widths of tree rings, the fluctuations of lake levels, the thickness of sedimentary rock deposits, the outbreak of volcanic eruptions, the occurrence of earthquakes, the number of sunspots, etc., almost endlessly.

The problems of rhythmic behaviour in all these various and unrelated phenomena have, however, one thing in common: The techniques of time series analysis should be largely the same, regardless of the nature of the phenomena being studied. A 9.6-year cycle in wolf abundance in Canada should be studied, statistically, in much the same way as a 9.6-year cycle in the run-off of a river in India.

Moreover, all the various cycles that have been found have one thing in common: When they are statistically significant, i.e., when they have repeated with enough dominance and enough regularity and enough times so that they cannot reasonably be the result of chance, they help us to throw light on the future. They do this whether our interest is in international conflict, immigration, earthquakes, solar radiation, meteorological, economic, biological or medical cycles. However, these two points of similarity in TECHNIQUE and USE are not, by themselves sufficient reason to propagate interdisciplinary cycle research.

When comparative studies are made of the cycles alleged to be present in various scientific fields, it is found that the periods are often the same. This is true not only for phenomena in the same discipline, but for completely unrelated phenomena. Of course, in many instances similarity in cycle periods may occur by sheer coincidence. However, there seems to be a non-chance distribution of the observed periods, i.e., many examples of certain periods are found but few or no examples of other periods. Moreover, cycles with the same period tend to have a turning point at the same calendar time regardless of phenomena or discipline. At this point, cycles become a matter of interdisciplinary concern.

Naturally, some of the cycles that have been alleged are merely accidental regularities of random fluctuations. On the other hand, there are reasons for thinking that many of the cycles are meaningful. For instance, many cycles have high statistical significance; they continue over many repetitions and continue over long spans of time unchanged, despite changed environmental conditions; cycles often dominate the behaviour of animals and man; they often show evidence of geographical patterns, i.e., cycles of the same period, regardless of phenomena, seem to come later and later as found from pole to equator; after distortion, cycles revert to the predistortion phase.

It is often assumed that many of the biological cycles have an endogenous origin. Such endogenous cycles can have high statistical significance, can repeat many times with great regularity, can be dominant, and, by shear coincidence, could have more or less the same period.

On the other hand, it would be extraordinary difficult for cycles of the same period in completely unrelated phenomena to turn at approximately the same time and to have geographical latitude patterns, unless the cause of the regularity were external to the phenomena involved.

The suggestion is thus inescapable that there may be hitherto unsuspected environmental forces which affect terrestrial affairs and determine the time of the ups and downs of many phenomena of interest and concern to mankind. Studies in recent years suggesting very long-term rhythmic fluctuations in a number of biological, medical, and inorganic phenomena strongly support this assumption. Under these circumstances the subject of comparative cycle study would thus seem to be a must for further investigation.

Some people will be interested to explore these possibilities. However, more scientists will prefer to confine their studies to cycles in their own disciplines. People with the latter interest can be most helpful to the major field of interdisciplinary study if they will determine the period of the cycles they study with the greatest possible accuracy; determine, in each instance, its statistical significance; record the latitude and longitude of the phenomenon evidencing the cycle; supply the data; explain the methodology in full; idealize the cycle, and, as important as anything, record the timing of the idealized cycle. Such studies are the bricks of which the larger structure is created.

No one can say whether or not the bricks are more important than the building. We need both. One must work in the area of one's interest. However, if it should be true that there are environmental forces that cause, or at least trigger and/or time the ups and downs of all aspects of human life, it becomes a matter of profound practical and philosophical importance and a challenge for every scientist interested in the broader aspects of the problems of the living world.

by Jake Bernstein, FSC Board Member

rulesbasedtrader@gmail.com

Cycles in economic data are not perfect or symmetrical. I use other tools to confirm cyclical turns. We also know that, given the rules of effective and consistent risk management, cyclical market behavior can and should occupy a key role in the management and/or trading of financial assets.

To use cycles effectively you need a trigger to confirm a top or bottom. Most often these are referred to as timing indicators. Shown below (Figure 1) is the chart I showed in a past article. It indicates my expectation of a cyclical low. Figure 2 (below) shows the current chart along with one of my timing indicators.)

Approximate 8.17 year cycle in Japanese yen futures versus U.S. dollar

Fig. 1: Approximate 8.17-year cycle in Japanese yen futures versus U.S. dollar

Status

My long-term forecast in the Japanese yen versus U.S. dollar index futures is currently of continued interest, not only pragmatically but intellectually as well. Figure 1 is the approximate 8- to 9-year (average 8.17-year) cyclical pattern in Japanese yen futures versus U.S. dollar, as it was when I first wrote about it in July. Although not perfect and not fully symmetrical, the cycle does “pick” the major up and down moves. The projection is shown at the right.

Do note that the cycle was obtained by visual examination of the available data; it has not been “discovered” through the application of any cycle finder program. Yes, the data history is limited but the cycle accuracy is impressive. (Note also that this analysis is not a buy or sell recommendation.)

What the Cycle Says Now

The cycle now suggests that a low is possible at any time. As soon as my timing indicators in this market turn bullish, I will be on board for what should be a major move up in yen vs. dollar Forex and futures. If the cycle holds true, the next few years should prove to be very bullish for yen/dollar. And now it becomes a game of patience!

It's important to note that while historical patterns can provide some guidance, they are not guaranteed to repeat exactly. Market conditions and external factors can always introduce variability.

Figure 2: Cycle low developing

(Charts courtesy tradenavigator.com)

About Jake Bernstein, FSC Board Member

Jake Bernstein has been publishing Jake Bernstein's Weekly Futures Trading Letter since 1972 and trading futures and stocks since 1968. His forecasts and opinions are quoted regularly in the financial press and on financial websites, and he is frequently interviewed on radio and television throughout the U.S. and Canada, including Wall Street Week, CNBC, JagFN.TV, and WebTV.com. In addition to speaking extensively in the U.S., Canada, Europe, and Asia, Bernstein is a consultant for investors, traders, industry, financial institutions, brokerage firms, and commercial firms. Floor traders, professional traders, money managers, and hedgers, both new and experienced, subscribe to his market advisory services. Bernstein is based in California, U.S.

Western geologists have established that there are very long climate cycles with periods in repeated ratios of two. Russian geologist S.N. Afanasiev has determined one of these cycles periods very accurately using his nanocycles method (translated from the Russian) and gets 586.24 million years.

So it is expected that the cycles periods are:

586.24 million years
293.12 million years
146.56 million years
73.28 million years
36.63 million years

When long-term records of climate and related variables are studied, such as temperature, atmospheric CO2 and sea level, these periods are clearly evident.

In the Wikipedia article Timeline of glaciation, the descent into icebox/ice-age conditions can be seen about every 146 million years.

Phanerozic Climate Change (millions of years ago)
(From wikipedia)

An icebox condition is defined as a period when one or both poles are ice bound either by ice-covered continent or permanent sea ice. We are still in such a condition but also in an interglacial, which is a brief period when conditions are warmer for up to about 10,000 years out of every 100,000 years, the rest of which consists of extended snow/ice cover over continents.

Dating these ancient conditions is not easy, but we do have estimates, which place the centers of the recent ice-age events around about:

740 million years ago
590 million years ago
445 million years ago
300 million years ago
145 million years ago

It is clear that we are in an ice-age event now, but we do not know when the middle of it is. It seems that we are past the middle of these ice ages and might actually be at the end.

If we are not at the end of these ice ages, then we should, by now, already be dipping into the next ice age maybe a few thousand years ago. James Lovelock of “Gaia” fame said that humans could not prevent the next ice age but later stated that he thought we already had prevented it.

If we are at the end of this ice-age period, then we can expect temperatures to rise rapidly as they did around 440 and 290 million years ago. It is quite credible that we are indeed at that point and that far hotter temperatures are in store for the earth over the next few million years.

What does this mean for life? We hear a lot of climate crisis talk recently with predictions of extinctions, but it should first be understood that complex life forms all began during the above graph period and that even mammal species started when the earth was far warmer than it is now.

People have expressed concern over the speed of possible future temperature changes, and this is a valid concern. Ocean life can largely adapt by changing latitudes as they have done before. However, humans have built many obstacles to animal migrations making this more difficult for animals. We have also destroyed many animal habitats and these matters are due serious concern and actions.

If we are now heading toward higher temperatures on the 146.56-million-year cycle, then human actions regarding carbon use are very unlikely to stop that happening – much better to work out how to cope. After all, life has enjoyed those conditions before.

Ray Tomes
FSC Science Director and Board Member

While working in systems software development and economic modeling for prediction, Ray Tomes discovered the importance of cycles. After joining the FSC in the 1980s, he spoke at numerous FSC conferences and ran a unit trust operating in futures markets. While studying cycles full time, he developed Harmonics Theory to explain observed patterns of cycles and the entire structure of the universe. He founded Cycles Research Institute, developed CATS cycles analysis software, and speaks internationally. He now acts as the Science Director on the FSC Board. Tomes is based in New Zealand.

by Jake Bernstein, FSC Board Member

rulesbasedtrader@gmail.com

Written: 26 August 2024

My last article in the FSC newsletter (July 25, 2024) discussed and illustrated my long-term cycle in the yen/U.S. dollar relationship. I showed the approximate 8.17-cycle (Figure 1 below) and stated that the cycle was bottoming.

My intent was to highlight a market that was, in my view, positioned for a major price move against the U.S. dollar and other currencies. Because we know that cycles in economic data are not perfect or symmetrical, we use other tools to confirm cyclical turns.

We also know that, given the rules of effective and consistent risk management, cyclical market behavior can and should occupy a key role in the management and/or trading of financial assets. This brief but well-illustrated follow-up shows what has transpired since my last article.

Long-Term Cycles Forecast: Yen/Dollar

My long-term forecast in the Japanese yen versus U.S. dollar futures is currently of particular interest, not only pragmatically but academically. Shown below is the approximate 8- to 9-year cyclical pattern (average 8.17-year) in Japanese yen futures versus U.S. dollar exactly as it was shown in the last report.

Although not perfect and not fully symmetrical, the cycle does “pick” the major up and down oscillations. The trend projection is shown on the right. Note that the cycle was obtained by visual examination of the available data; it has not been discovered through the application of any cycle finder program. Yes, the data history is limited, but the cycle accuracy is impressive. (Note, this analysis is not a buy or sell recommendation).

What the Cycle Says Right Now When Combined With Timing

The cycle as discussed in my last article suggested that a low was possible at any time. In my work, I combine timing with cycles to compensate for the inherent imperfection of cycles.

Therefore, as soon as my timing indicators in this market turned positive, I was confident that a major move up in yen vs. dollar forex and futures had started. If the cycle holds true, the next few years should prove to be very bullish for the yen/dollar.

Figure 1: Approximate 8.17-year cycle in Japanese yen futures versus U.S. dollar index futures

Approximate 8.17-year cycle in Japanese yen futures versus U.S. dollar index futures (Chart courtesy tradenavigator.com)

(Chart courtesy tradenavigator.com)

Figure 2: A closer look at the approximate 8.17-year cycle in Japanese yen futures versus U.S. dollar index futures

A closer look at the approximate 8.17-year cycle in Japanese yen futures versus U.S. dollar index futures (Chart courtesy tradenavigator.com)

(Chart courtesy tradenavigator.com)

Figure 3: What has happened since my forecast

What has happened since my forecast (chart courtesy tradenavigator.com)

(Chart courtesy tradenavigator.com)

It's important to note that while historical patterns can provide some guidance, they are not guaranteed to repeat exactly. Market conditions and external factors can always introduce variability, which is why I use timing indicators to confirm timing. Shown below is the expansion/contraction indicator that triggered a cycle low (expansioncontraction.com).

Figure 4: Expansion/contraction indicator with yen ETF

Expansion/contraction indicator with Yen ETF (Chart courtesy wealthcharts.com)

(Chart courtesy wealthcharts.com)

About Jake Bernstein, FSC Board Member

The Foundation for the Study of Cycles (FSC) hosts two major summits annually at the beginning of the year and midyear: Market Forecast and the Financial Cycles Summit.

The events bring together leading cycles practitioners and trading professionals using state-of-the-art cyclical analysis tools.

This year’s midyear summit – six hours over three days – brought a few surprises and even a little controversy. Most importantly, it gave participants succinct and actionable forecasts.

You can watch all of the replays on Cycles TV. Following are brief summaries of each presentation (six in total).

Peter Eliades

The event kicked off with keynote speaker, Peter Eliades, market analyst and founder of Stock Market Cycles newsletter. Eliades is on alert for a crash scenario akin to the historical rhyme pattern of TMT 2000. Most notably, he flagged record concentration risk in tech stocks with NVIDIA’s accounting for 50% of the S&P500 YTD gains. Further broader market fragility is also seen (chart). However, several other experts remained bullish.

Market Fragility Akin to 2000

Most notably, Bill Sarubbi, FSC Board Member and regular Forbes contributor, recalled the challenges of timing a melt-up phase, citing “too much money is lifting all asset classes”. Conversely, his analysis points to a healthy rotation, with some tech stock bifurcation, coupled with new leadership into areas such as banks and energy. Sarubbi’s composite cycle model remains bullish into Q3 2024 (chart).

Monthly S&P Cycles in Q3 2024

Jake Bernstein, FSC Board Member and publisher of Jake Bernstein's Weekly Futures Trading Letter, shared latest market insights using his science-of-trading approach. Additional overlays included price and indicator cycles, divergence, seasonals, sentiment positioning, and patterns. Bernstein remains bullish on commodities across the industrial, precious metals, and agricultural sectors. He expects copper, gold, and wheat to surge into 2026 (chart). In cross-assets, his timing analysis signals a GBPUSD cyclical low and unwind in U.S. rates.

Gold Surge Into 2026

Lars von Thienen, FSC Board Member and host of Market Cycles Report, continued his deep-dive focus on crypto using the FSC's timing model, which marked the recent key inflection points, and included the latest bottom and end of winter season. He reviewed Bitcoin’s 200-day cycle, overlaid seasonal and having cycle data, which signal a tactical unwind. Although a renewed surge is expected into early 2025 followed by another top pattern (chart).

Gold Impulse Wave Ahead

Dr. Richard Smith, FSC Chairman of the Board and Executive Director and host of Trading Market Cycles, highlighted trading beliefs, approach, and short-term cycles. He primarily focused on U.S. equities marked by price-time divergences. Additional strategies included risk management and diversification (chart), which signaled beneficial portfolio exposure to USD.

Portfolio Correlation Matrix

Andrew Pancholi focused on macro cycles based on the patterns of human behaviour. His analysis continues to warn of multiple disruptive forces as part of a shift from “globalisation to polarisation”. Pancholi warned of revolutionary tensions in the U.S., populist trends across the world (chart), amplified by the 40 elections in 2024. What lies ahead? Expect a rise of so-called black-swan events, amplified by geopolitical tensions and likely war drums.

84-Year Populist Movement Cycle

Meanwhile, as part of the FSC leadership team, I also shared insights, themed on my “behavioural inflection point” thesis, still pressured by a triple whammy of headwinds, momentum extremes, rotation fragility, and cycle asymmetric risk. The U.S. election cycle is also featured, predicting volatility in the coming months ahead (chart).

Election Cycle Pattern

You can watch all FSC presentations here.

Thank you to all FSC Members for all your kind feedback and insightful questions. I welcome more interaction at ron.william@cycles.org

Ron William, CFTe Bio

LinkedIn, Twitter

Ron William, CFTe, is a market strategist and educator/mentor with more than 20 years of experience working for leading macro research and institutional firms, producing tactical research and trading strategies. He specializes in global, multi-asset, top-down framework, grounded in behavioural technical analysis, driven by cycles based on the "Roadmap" signature model of veteran market technician Robin Griffiths, published in his book “Mapping the Markets.”

by Jake Bernstein, FSC Board Member

rulesbasedtrader@gmail.com

In my fledgling days as an investor in the late 1960s, I discovered the magic of cycles and other cyclical patterns in the stock and futures markets. The beauty of repetitive price and time inspired wonder as well as challenge. The deeper I looked at cycles in the capital markets, the more convinced I became of their value, not only as a forecasting tool but as a means of more effectively managing economies, investments, trading, and commodity production. The field of cyclical analysis writ large, has fueled literally hundreds of books and thousands of research studies. For this, we can thank Edward R. Dewey, the father of cyclical analysis.

My intent in this brief report is to highlight a market that is, in my view, positioned for a major price move. Because we know that cycles in economic data are not perfect or symmetrical, we use other tools to confirm cyclical turns. We also know that, given the rules of effective and consistent risk management, cyclical market behavior can and should occupy a key role in the management and/or trading of financial assets.

Long-Term versus Short-Term Cycles

I am neither a mathematician nor an economist. I am, however, a pragmatist. I do not spend my time pondering the ontology of cycles; rather I prefer to use them as tools for predicting and investing in large, and often long-term market trends. The 17- to 18-year cycle in real estate, for example, has allowed me to be profitable in every real estate transaction I have ever done. Furthermore, the longer-term cycles such as the 10-year cycle (per Schumpeter) and the three- to four-year business cycles have also facilitated my ability to successfully forecast price trends.

The Here and Now

My long-term forecast in the Japanese yen versus U.S. dollar futures is currently of particular interest, not only pragmatically but intellectually. Shown below is the approximate eight- to nine-year (average 8.17 year) cyclical pattern in Japanese yen futures versus U.S. dollar. Although not perfect and not fully symmetrical, the cycle does pick the major up and down moves. The projection is shown at the right. Do note that the cycle was obtained by visual examination of the available data; it has not been discovered through the application of any cycle finder program. Yes, the data history is limited but the cycle accuracy is impressive. (Note also that this analysis is not a buy or sell recommendation.)

CHART: Approximate 8.17-year cycle in Japanese yen futures versus U.S. dollar

Japanese Yen (Elec) Cont Liq @ CME (Quarterly Bars)

(Chart courtesy of tradenavigator.com)

What the Cycle Says Right Now

The cycle now suggests that a low is possible at any time. I combine timing with cycles to compensate for the inherent imperfection of cycles. Therefore, as soon as my timing indicators in this market turn bullish, I will be on board for what should be a major move up in yen vs. dollar forex and futures. If the cycle holds true, the next few years should prove to be very bullish for yen/dollar.

Reasons

For me, no fundamental justifications are necessary. Typically, these justifications or explanations come after a turn has been made. Those looking for reasons why might want to consider the following factors, which could confirm the cyclical expectations.

As stated and illustrated above, the JPY/USD exchange rate has exhibited cyclical patterns, often with cycles of approximately seven to eight years. These cycles can be influenced by numerous factors such as interest rate differentials, economic growth rates, trade balances, and geopolitical stability.

For 2023, if we consider the historical cyclical pattern, we might expect a low now in the JPY/USD exchange rate. This could be influenced by factors such as:

Interest Rate Policies: If the Bank of Japan maintains low interest rates while the U.S. Federal Reserve raises rates, it could put downward pressure on the yen.
Economic Conditions: Japan's economic performance relative to the U.S. could also play a role. If Japan's economy underperforms, it could lead to a weaker yen.
Geopolitical Factors: Any geopolitical tensions or uncertainties could impact the yen's value as a safe-haven currency. I will issue an update, as necessary.

It's important to note that, while historical patterns can provide some guidance, they are not guaranteed to repeat exactly. Market conditions and external factors can always introduce variability.

About Jake Bernstein, FSC Board Member

FSC Board Member Bill Sarubbi was the special guest presenter at the July 16, 2024, Masters Working Group (MWG) interactive session. This summary of his presentation is a sample of the content and high level of discussions happening at the interactive sessions twice a month. MWG is FSC's most exclusive Membership tier and is made up of a small group (less than 50) elite investors, traders, and cycles practitioners. We are currently accepting applications for ten new members of the MWG. If you’re interested in finding out more, book a call with D.R. Barton, FSC's Market Strategy Director [LINK].

Introduction

Bill Sarubbi has extensive experience in the markets since 1966. A trained therapist, he worked as a buy- and sell-side analyst and has been a Member of the FSC for 42 years.
Current Market View: Sarubbi believes there is too much money in the world, evidenced by high-value sales in collectibles (i.e., Sex Pistols single selling for £24,000). This is causing a bull market for almost all assets

Market Overview

General Outlook: Correction expected in tech and communication services sectors
- Broader Market: Overall bull into 2025
Trends: Positive outlook for next year due to historical patterns in years ending in five and post-election years
Short-Term Sentiment: Current optimism is too high, indicating a potential short-term correction

Indicators and Sentiment

Put/Call Ratio: High open interest put/call ratio suggests excessive bullishness
Investors Intelligence Weekly Sentiment Survey: Bullish sentiment above 63%, historically leading to below-average returns.

Market Rotation

Sector Rotation: Money flowing out of tech and communication services into lagging sectors (good thing that supports the bull market)
Breadth Indicators: Broad market indices like the NYSE composite and Russell 2000 showing strength despite declines in tech-heavy indices

Technical Analysis

Key Indices: S&P 500 and Nasdaq expected to head higher after recent pullback has cleared
Cycle Patterns:
- Emphasis on long-term cycles, such as the decennial pattern, supporting continued market strength
- 1-4-10 cycle shows bottoming of this pullback (chart)

1-4-10-Year Cycles 2024

- Better seen in the bottom of graph 1-4-10 Year Cycle 2024 (blue line), which is a composite of the 1-4-10 year cycles (arrow shows the current decline, which typically lasts into the end of July):

Monthly S&P Cycles in Q3 2024

Suggested Trades and Positions

Current Holdings:
- Long Positions: Apple, Qualcomm, Tesla, Netflix
- New Additions: Ryder, Google, Goldman Sachs, Oracle, HPQ
- Short Positions: Autodesk, Walgreens Boots, Ford, Uber
Trade Ideas:
- J.B. Hunt Transportation Services: Positive earnings surprise expected (short-term only)
- Grindr: Strong performance and favorable cycle indicators
- Costco: Reducing position due to expected lag in performance
- Corning (GLW): Anticipated underperformance

Bonds and Notes

Ten-Year Notes: Favorable seasonal period from June to August, holding a double long position
Gold: Expected to stay in a range, with a positive bias until mid-August
Oil: Buying double long oil ETFs based on projected turning points

Gold Analysis

Technical Formation: Gold broke out of a rectangle formation, projected to rise
Seasonality: Positive outlook from July to October
Cycles: Weekly cycle suggesting a buy signal soon

Additional Insights

Market Resilience: Belief in the market's ability to stay resilient due to high liquidity
Historical Comparisons: Past market cycles and how they inform current strategies
Sentiment: Watching sentiment indicators closely for market timing

Q&A

Dollar and Gold Relationship: Generally inverse, but both can rise together in certain periods
Earnings Surprise Method: Leveraging earnings season volatility for trades, with a success rate of 65-70%
Long-Term Cycles: Importance and influence of long-term cycles on market trends