Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
S&P 500 – Is a 5% Correction Enough? - 6th Dec 21
Global Stock Markets It’s Do-Or-Die Time - 6th Dec 21
Hawks Triumph, Doves Lose, Gold Bulls Cry! - 6th Dec 21
How Stock Investors Can Cash in on President Biden’s new Climate Plan - 6th Dec 21
The Lithium Tech That Could Send The EV Boom Into Overdrive - 6th Dec 21
How Stagflation Effects Stocks - 5th Dec 21
Bitcoin FLASH CRASH! Cryptos Blood Bath as Exchanges Run Stops, An Early Christmas Present for Some? - 5th Dec 21
TESCO Pre Omicron Panic Christmas Decorations Festive Shop 2021 - 5th Dec 21
Dow Stock Market Trend Forecast Into Mid 2022 - 4th Dec 21
INVESTING LESSON - Give your Portfolio Some Breathing Space - 4th Dec 21
Don’t Get Yourself Into a Bull Trap With Gold - 4th Dec 21
GOLD HAS LOTS OF POTENTIAL DOWNSIDE - 4th Dec 21
4 Tips To Help You Take Better Care Of Your Personal Finances- 4th Dec 21
What Is A Golden Cross Pattern In Trading? - 4th Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - Part 2 - 3rd Dec 21
Stock Market Major Turning Point Taking Place - 3rd Dec 21
The Masters of the Universe and Gold - 3rd Dec 21
This simple Stock Market mindset shift could help you make millions - 3rd Dec 21
Will the Glasgow Summit (COP26) Affect Energy Prices? - 3rd Dec 21
Peloton 35% CRASH a Lesson of What Happens When One Over Pays for a Loss Making Growth Stock - 1st Dec 21
Stock Market Sentiment Speaks: I Fear For Retirees For The Next 20 Years - 1st Dec 21 t
Will the Anointed Finanical Experts Get It Wrong Again? - 1st Dec 21
Main Differences Between the UK and Canadian Gaming Markets - 1st Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - 30th Nov 21
Omicron Covid Wave 4 Impact on Financial Markets - 30th Nov 21
Can You Hear It? That’s the Crowd Booing Gold’s Downturn - 30th Nov 21
Economic and Market Impacts of Omicron Strain Covid 4th Wave - 30th Nov 21
Stock Market Historical Trends Suggest A Strengthening Bullish Trend In December - 30th Nov 21
Crypto Market Analysis: What Trading Will Look Like in 2022 for Novice and Veteran Traders? - 30th Nov 21
Best Stocks for Investing to Profit form the Metaverse and Get Rich - 29th Nov 21
Should You Invest In Real Estate In 2021? - 29th Nov 21
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Stock Market, The Collapse of Wall Cycle #6

Stock-Markets / Cycles Analysis Nov 16, 2011 - 02:01 AM GMT

By: David_Knox_Barker

Stock-Markets

Best Financial Markets Analysis ArticleThe late market analyst PQ Wall put forward a rather bold proposal concerning the regular business cycle, which is also known as the Kitchin cycle. Wall concluded that every business cycle subdivides into three sets of three smaller cycles, for nine total cycles. Based on PQ's contribution to market cycle research, this cycle is known as the Wall cycle. The Wall cycle ideally runs about 142 days in length, just over 20-weeks, but they often run shorter and longer than this ideal length in Fibonacci ratios of their ideal length.


The Wall cycle is must track cycle for investors and traders, while for unsuspecting investors and traders it is a recurring nightmare. The Wall cycle regularly discounts market prices and provides regular buying and selling opportunities for value and growth investors.

The evidence is mounting that PQ Wall was correct and that every business cycle contains nine smaller cycles. This fact is particularly relevant at this time. PQ Wall taught that cycles 3, 6 and 9 in every business cycle are the weakest cycle at the end of every third of a business cycle.

The Wall cycle is a timely topic because major developed global markets are currently hitting Fibonacci price resistance at the top of Wall #6. From the March 2009, global market lows there have been five full Wall cycles. Global markets are now testing the top-end of Wall #6, and many appear to be rolling over. The collapse of Wall #6 may be one for the record books.

The global Wall cycle picture is mixed. Over-the-top fiscal and monetary intervention and artifical support of markets is distorting sentiment readings. However, the August lows have held in the NASDAQ 100, the UK FTSE 100, the Swiss SMI, the Australian ASX and a few other developed and emerging markets and sentiment has now reached overbought levels, indicating Wall #6 is ready to decline.

The chart below demonstrates the dynamic clockwork of the price, time and sentiment in the six Wall cycles in Switzerland's SMI since the March 2009 lows. The 20-to-80-to-20 runs in the stochastics are the 8-period weekly fast. The chart also demonstrates that the SMI is now attempting to stay above the golden ratio Level 2 Fibonacci grid target at 5639. The Level 1 grid comes from the most important Level 1 high and low that demonstrates Fibonacci turns. When important Level 1 and Level 2 Fibonacci support targets give way in any market, it often marks the turn of a Wall cycle at a top or bottom. A break below the Level 2 golden in the SMI is expected to accelerate the decline of Wall #6, with other major markets at critical Fibonacci support and resistance levels.

Wall Cycle #6

Market analysis that seeks to uncover the cycles driving global markets is a tough job when governments and central bankers spending other people's money (OPM) fire trillions in U.S. dollar and euro bazookas randomly into markets. The deployment of large sums of capital without the conviction and discretion of the true self-interested earner and owner of the capital distorts markets, attempting to shift risks into the future. It can accelerate declines when they finally come.

Intervention is clearly distorting the cycles, but the primary cycle count remains that global developed markets are topping in Wall Cycle #6. Global markets now face a third, last and weakest Wall cycle decline. Despite the call of the bulls and some of the tempting evidence in their favor, such as the power of the large cap franchise companies to deliver profits, the path of least cycle resistance is down.

The S&P 500 chart presented below demonstrates that Wall #3 was far weaker than the other cycles into the July 1, 2010 low and the golden ratio Fibonacci supporting floor. The stochastics are 55-period daily fast. The market declines into October in many developed markets are candidates for a third, last and weakest Wall #6. However, the weight of the global cycle evidence and the acceleration of the debt crisis in Europe and in the U.S., indicates Wall cycle #6 remains in force, with the greatest declines straight ahead.

Kitchin Cycle

The rally from the October lows appears to be an elaborate bull trap set by Wall Cycle #6. If the current Level 2 Fibonacci 76.4% supporting target of S&P 500 1228 does not hold, the decline could take on a life of its own. The S&P 500 summer 2010 lows at 1013 in the S&P 500 may require a test. It is possible they will fail. In short, get prepared for the collapse of Wall #6. It has the potential to shake global financial markets to their foundations.

David Knox Barker is a long wave analyst, technical market analyst, world-systems analyst and author of Jubilee on Wall Street; An Optimistic Look at the Global Financial Crash, Updated and Expanded Edition (2009). He is the founder of LongWaveDynamics.com, and the publisher and editor of The Long Wave Dynamics Letter and the LWD Weekly Update Blog. Barker has studied and researched the Kondratieff long wave “Jubilee” cycle for over 25 years. He is one of the world’s foremost experts on the economic long wave. Barker was also founder and CEO for ten years from 1997 to 2007 of a successful life sciences research and marketing services company, serving a majority of the top 20 global life science companies. Barker holds a bachelor’s degree in finance and a master’s degree in political science.  He enjoys reading, running and discussing big ideas with family and friends. 

© 2011 Copyright David Knox Barker - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in