Stock Market 13-14 Month Cycle Low

By: Ed_Carlson

The 20th century market guru, George Lindsay, explained that, no matter how long a bear market lasts, there is usually an obvious low 13 to 14 months after the previous bull market high (in this case, May 2015). This 13-14 month low is important even though it may not be the low of the Basic Cycle. 13-14 months is the time span of a long Basic Decline.

"Not just any secondary top or bottom. But the secondary high or low, the one that fairly jumps out at you from a bar chart."

The duration of any rally after month 13/14 is variable; it can continue as long as five months. The duration of the rally is a relatively minor matter. The important part is this: Once the period of rallies ends and the market again turns down, the active part of the remaining decline has always been brief - not more than about three months at most. The decline to the Basic Cycle low has rarely lasted longer than 101 days.

Any remaining decline to a lower low, from the top of a bounce off of the 13/14 month low, has always been brief. A maximum decline of 101 days after the top of the bounce should be expected.

The above assumes higher highs are to come. However, if the Dow is engaged in a terminal decline (the final decline of the Long Cycle from point H or J to point M) then the 13-14mo low is followed by both a relief rally then another Basic Decline (~1 year) to lower lows. If the Dow breaks the February lows then it is a good bet that equities are in a Terminal Decline on their way to point M.

For now, it is enough to know that this 13-14 month low is due in either June or July this year.

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Ed Carlson, author of George Lindsay and the Art of Technical Analysis, and his new book, George Lindsay's An Aid to Timing is an independent trader, consultant, and Chartered Market Technician (CMT) based in Seattle. Carlson manages the website Seattle Technical Advisors.com, where he publishes daily and weekly commentary. He spent twenty years as a stockbroker and holds an M.B.A. from Wichita State University.

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