The 162-Year Cycle in Stocks and Commodities Since 1555 | Ahmed Farghaly

 Stock Prices 1509 to date.

 

The chart above begins at the millennial low in 1555, followed by a remarkable sequence. I first discovered the 162-year cycle by drawing a trendline between two consecutive lows of the 54-year cycle, specifically the lows of 1842 and 1896. A break in such a trendline suggests that a larger cycle has turned, and indeed, the trendline was broken during the 1929-1932 crash. This provided me with an early indication of the 162-year cycle's presence. I assumed it was a 162-year cycle because the first 54-year cycle used to draw the trendline marked a rally off a bear market that lasted 64 years, making it an ideal starting point. I then confirmed my hypothesis by examining wheat prices and, later, commodity prices, which led me to conclude that the existence of the 162-year cycle is no longer a hypothesis but a fact.

The combined chart offers further evidence of this cycle’s presence. Notice how neatly the first 324-year cycle subdivides into two 162-year cycles. The trough of the 162-year cycle is precisely in the middle of the 324-year cycle. Upon closer inspection, you’ll see that both 162-year cycles subdivide into three 54-year cycles, reinforcing our conclusion that the Kondratieff wave is the third harmonic of the 162-year cycle. After the trough in 1784, we experienced three 54-year cycles, ending with the crash of the late 1920s, which marked the trough of the 162-year cycle. What followed was the greatest bull market in modern history, and it is unfortunate that we are nearing its end. The peak of the last 324-year cycle occurred in the third 18-year cycle of the second 54-year cycle of the second 162-year cycle, which is where we find ourselves today. The likelihood of further translation beyond the previous 324-year cycle is slim, considering that the influence of the 972-year cycle has leveled out since the 1930s.

The Elliott Wave structure is also quite interesting. What stands out on the chart is the fact that we had a fifth-wave extension in the entire advance since 1784. Even more intriguing is that the move from 1932 also featured a fifth-wave extension. According to the wave principle, fifth-wave extensions are typically followed by crashes. Commodities offer excellent examples of this phenomenon, as their dramatic crashes are often the result of a fifth-wave extension. 

 

Quoted from:
Ahmed Farghaly (2016) - The 162-Year Cycle in Stocks and Commodities Since 1555.