The 18 Year Economic Cycle │Akhil Patel

Akhil Patel was the special guest presenter at the Foundation for the Study of Cycles' June 3 'Masters Working Group' interactive session. Author of 'The Secret Wealth Advantage', Patel discusses how the 18 year cycle affects the markets and how it can transform investing strategies. Patel is one of the world’s leading experts in economic, financial, and property cycles. He has been working for over a decade to produce unique research that combines an in- depth understanding of business, real estate, and stock market cycles. 

 

Reference:
Akhil Patel (June 4, 2024) - Significance of the 18-Year Cycle. (video)

 

See also:
The 18.6 Year Real Estate Cycle.  

2024 in W.D. Gann's Financial Time Table.

Periods When to Make Money | Benner Cycle Projection into 2023 Major Low

Samuel Benner was a prosperous American farmer wiped out financially by the 1873 panic and a hog cholera epidemic. In retirement, he set about to establish the causes and timing of fluctuations in the economy. 

 

Edward R. Dewey (1967):
» If you had used these dates for trading, your percentage gains between 1872 and 1939
would have been 50 times your losses! «

In 1875 he published a book called "Benner's prophecies of future ups and downs in prices" forecasting commodity prices for the period 1876 to 1904. Many - not all - of these forecasts were fairly accurate. The Benner Cycle includes:

• A (upper line): "Years in which Panics have occurred and will occur again." A 54 year cycle alternating every 18, 20 and 16 years.
  
• B (middle line): "Years of Good Times, High Prices and the time to sell Stocks and values of all kinds." Cycles alternating every 8, 9 and 10 years.
• C (lower line): "Years of Hard Times, Low Prices, and a good time to buy Stocks, 'Corner Lots', Goods, etc, and hold till the 'Boom' reaches the years of good times; then unload". A 27 year cycle in pig iron prices with lows every 7, 11, 9 years and peaks in the order 8, 9, 10 years (B - middle line).

Benner's cycle projections align with the latest analysis of the "Foundation for the Study of Cycles" and are pointing to a major stock market low in the US in 2023. David Hickson's Hurst cycle analysis projects this low to March of 2023 and Martin Armstrong to April 11, 2023 (Tue).

 

» Periods When to Make Money « ; the original business card of George Tritch Hardware Co.
Apparently, the diagram was compiled by George Tritch in 1872, but was not attributed to
him by Samuel Benner in 1875.

 

References:

 George Tritch (1872) - "Periods When to Make Money" - Business Card of George Tritch Hardware Co.

Samuel Benner (1884) - Benner's prophecies of future ups and downs in prices (3rd. Ed.; original 1875)

 W.D. Gann (1909) - Financial Time Table 1784 - 2102

Edward R. Dewey (1967) - The Case for Cycles 

Elwynn Taylor (2004) - Crop Weather Cycles: Myth or Reality?

Martin A. Armstrong (2008) - The 8.6 Year Global Business Cycle 2002 - 2028

Charles Capriole (2020) - George Tritch Strategy from 1872 has a 90% hit rate
David McMinn (2022) - Benner Cycles & the 9/56 year grid

David Hickson (Oct 3, 2022) - The Next 20 Weeks - S&P 500 - Hurst Cycles Market Update
Lars von  Thienen (Oct 9, 2022) - Market Cycles Report - Cycles of Financial Crisis using long term static cycle models.

TPR (2015) - Future Ups and Downs into 2065. Samuel Benner’s Prophecies.

 

 

The Tritch / Benner Strategy yielded 7,939% from 1872 to 2020

SPX vs 4.5 Degree Steps of Lunar Node to Lunar Apogee | 80th Harmonic

Upcoming aspects in this 18 Year Cycle:
Feb 04 (Sat) = 85.5 degrees, Mar 14 (Tue) =  90 degrees, Apr 13 (Thu), May 07 (Sun), May 26 (Fri),
Jun 19 (Mon), Jul 16 (Sun), Aug 22 (Tue), Sep 25 (Mon), Oct 21 (Sat), Nov 12 (Sun), Dec 02 (Sat),
Dec 26 (Tue), 2018 Jan 29 (Mon) = 144 degrees. See also HERE

SPX vs 15 Degree Steps of Lunar Node to Lunar Apogee | 24th Harmonic

Upcoming aspects in this 18 Year Cycle:
Jan 12 (Thu) = 165 degrees, Mar 14 (Tue) = 180 degrees, Apr 28 (Fri), Jun 04 (Sun), Jul 16 (Sun),
Sep 17 (Sun), Oct 28 (Sat), Dec 02 (Sat), Jan 15, 2018 (Mon).

David McMinn (2016): 9/56 Year Cycle: Lunar North Node - Apogee Angles [5 p.]

DJIA vs 18 Year Cycle | Cyclic Vibrations

Ahmed Farghaly (Nov 16, 2016) - The peak of the 18 year cycle should be
expected sometimes in late January early February 2017 (see also HERE)

Share Prices from 1509 to 2016 | Tide in the Affairs of Men

There is a tide in the affairs of men.
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat,
And we must take the current when it serves,
Or lose our ventures.

William Shakespeare | Julius Caesar: Act 4, Scene 3, 218 – 224.

High Resolution *.pdf HERE | Source: HERE

The Pattern of US Bankruptcies | Cyclic Vibrations

Ahmed Farghaly (Oct 22, 2016) - I found an interesting pattern in the Gold Miner's index. I realized that at the beginning of the previous two Kondratieff waves the US had defaulted on their obligations. This is the reason why a human brain is superior to spectral analysis, we tend to spot patterns earlier. In 1933 the US Treasury was official declared bankrupt after the emergency banking act was voted into law by congress. "The Emergency Banking Act succeeded in abrogating America’s gold standard and hypothecated all property found within the United States to the Board of Governors of the Federal Reserve Bank." This bankruptcy occurred after world war one as visible on the picture above. The Vietnam war was the culprit of the second American bankruptcy with the closing of the Gold window in 1971 by president Nixon. So much money was printed to fund the war that there was no way the US could redeem holders of US dollar with Gold at the pegged rate of $35 an ounce. We once again have the same pattern recurring at the time of writing. We had the Iraq/Afghanistan war the debt of which has become to big of a burden to service and history will once again repeat with yet another bankruptcy in a few short years. This will obviously have a devastating impact on the entire world since US Treasuries are the largest single asset that people own world wide. I wonder how China will react to such a bankruptcy but I guess only time will tell. I am so certain that this is going to occur not only because of the pattern that we see on the Gold Miner's index but that of Donald Trump's upcoming presidency. 

I analyzed all the similar cyclical circumstances and under all of them the president of the United States was a republican. Those cyclical circumstances include 1861, 1881, 1971 and 2001. This gives us reason to believe that without question the next president of the United States will be Donald J. Trump. We can also look at Hillary Clinton's history to discern if she is likely to make it to the White House. First, We know that the similar cyclical circumstance in terms of the 54 month wave saw Hillary Clinton lose in the primaries against Obama. We also know that she lost against Obama once again in the similar cyclical position in terms of the 9 year cycle. We also know that she left the White House in the similar cyclical circumstance in terms of the 18 year cycle. Now that we are certain that Donald J Trump will win the election we can combine that with what we have discerned from the Gold Miner's index with his history of Bankruptcies. Donald Trump filed for bankruptcy a total of 6 times the last of which was in 2009. W.D. Gann said that the highest correlations occur with the most recent similar cyclical circumstance. The 2009 low is expected to reoccur in 2017 and hence we can expect a bankrupt United States government before the end of next year or the year after at the latest.

Trump's plan for his first 100 days in office (HERE)

Financial Crisis and Market Panics | From 1500 to the Present

Source: @Stock_Trend_Chg

German DAX: Gloom, Boom and Doom | Cyclic Vibrations

Ahmed Farghaly (Oct 02, 2016) - There is no question in most commentator's minds that the growth in Germany has certainly slowed relative to what this great country has enjoyed in the 20th century […] The reason for my post about Germany is because the first domino to fall in the upcoming financial calamity seems to be Deutsche Bank […] The upcoming calamity is not going to be like 2008 which was merely a correction of the 18 year cycle. The decline is likely […] of the 324 year cycle and will make 2008 seem like a tiny little hick up within the unraveling of a much larger cycle correction.

[…] The German DAX is likely to not only decline but have an outright collapse of a magnitude not witnessed in our lives. The S&P/DAX ratio is in favor of the S&P which suggests that we are likely to see a larger decline in Germany. 

German Stocks In Trend Limbo
Source: Dana Lyons' Tumblr.

Dubai Financial Market Index: 70% Decline Expected | Cyclic Vibrations

Ahmed Farghaly (Oct 01, 2016) - As visible the immediate projection for the Dubai Financial Market General Index (DFMGI) is a similar catastrophe as 2008! This would mean that the money to be spent on the new projects and on the infrastructure for the Expo 2020 is certainly not enough to keep the economy going. Our conservative projection is a 70% decline from current levels despite all the money being spent. The world expo in Dubai will occur at a time when the global economy will be at distress and hence revenues will likely not make up for the costs of hosting the event and will most likely lead to another Dubai debt crisis. 

 

In April 2006 Elliott Wave Financial Forecast presented the above close-up of two "Skyscraper" tip-offs [Malaysia's Petronas Towers and Taiwan's Taipei 101] and wrote: "Everything points to a similar fate in Dubai", and that Burj Dubai would "open its doors in the aftermath of the bull market that gave rise to its creation".

New Insights in Commodities | Cyclic Vibrations

Ahmed Farghaly (Jul 1, 2016) - The first chart is a synthetic chart of commodities. The way it was constructed was by isolating the second 18 year cycle of three 54 year cycle. The reason why I extracted the second 18 year cycle is because this is the cycle we are in right now in terms of commodities hence it should be correlated more with its counterpart in past 54 year cycles. I have also altered the length of the cycles to match the current average length of the 18 year cycle which is approximately 14.4 years. I then combined those cycles together in order to get a continuous series so I can isolate the cycle via spectral analysis and run neural network models on this particular position of the Kondratieff wave. The indicator that you see above is a neural network model with an 14.4 year cycle used as an input and the detrended zigzag as the output. This indicator's turning point should mimic those in the future provided that no significant changes occur to the length of the nominal 18 year wave. The second chart depicts the dates more clearly.

It is worth mentioning that the 14.4 year cycle with 4 harmonics was used as the input rather than just one harmonic, the reason for this was to aid us in depicted the peaks and troughs of the cycles smaller than the 14.4 year wave. As is visible on the chart above, we seem to have a clear path in the CRB index until late 2017. The projection also suggests that 2018 is likely to be a bad year for commodities. This correction should then be followed by a move into 4th quarter of 2020 followed by a correction to 2022 and so on (third chart).

In the neural network model below the price chart is an up percentage move indicator (fourth chart). It is calculated by having the cycle as an input and measuring the position of moves of over 7% a month and projecting something similar for the future of the current cycle. The likelihood of large percentage months on a closing basis is greatest from here going into mid 2019. Hence capital is best allocated in the commodity market now rather than chase the move after most of the large percentage gains have already been realized (fourth chart).

This indicator (fourth chart) is a forecast of the volatility index indicator using the same input as the charts above. It seems evident that the likelihood of high volatility is greatest from now going into 2020. This would mean that the purchase of call options are likely to be a better play than their sale in the upcoming environment. Trading in expectation of low volatility will probabalisticly lead to a loss going into 2020.

CHF Long Against EUR + USD | EUR/USD to Double | Cyclic Vibrations

Ahmed Ferghaly's latest cyclic analysis of currencies searches for possibilities to long against the USD in the upcoming
environment. EUR and USD are likely to perform a continued, maybe drastic devaluation towards the CHF into 2019.
Then the recovery rally of the EUR is expected to last into late 2023 (HERE + HERE)

In this 18 Year Cycle the EUR should double to the USD (HERE).

The 162 Year Cycle | Stocks and Commodities since 1555

Stock Prices 1509 to date | Video | Enlarge Chart

Ahmed Farghaly (May 18, 2016): "[...] The chart starts at the millennial low in 1555 and what followed is an absolute beauty. The way I first discovered the 162 year cycle was through drawing a trendline between two consecutive lows of the 54 year cycle. The lows I chose were that of 1842 and 1896. A break of such a trendline would suggest that a larger cycle has turned and indeed the trendline was broken in the 1929-1932 crash. This gave me a hint of the presence of a 162 year cycle. I assumed it was a 162 year cycle since the first 54 year cycle chosen to draw the trendline was a rally off of a bear market that lasted 64 years hence It was the ideal starting point. I then confirmed my hypothesis by looking at wheat prices and eventually commodity prices which made me conclude that the 162 year cycle's presence is no longer a hypothesis, it is a fact. The combined chart that [at left] is further evidence to its presence. Notice how nicely the first 324 year cycle subdivided into two 162 year cycles. The 162 year cycle trough was precisely in the middle of this 324 year cycle. If you look deeper into the picture you will notice that both 162 year cycles subdivided into three 54 year cycles supporting our conclusion that the Kondratieff wave is the third harmonic of the 162 year cycle. After the trough in 1784, we had three 54 year cycles that ended with the crash of the late 1920s which marked a trough of the 162 year cycle. What followed was the greatest bull market in modern history and it is unfortunate that we are close to its terminus. 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 a position that we are in today. The likelihood of further translation than the previous 324 year cycle is slim considering that the force of the 972 year cycle has leveled out since the 1930s. 

The Elliott Wave structure is certainly interesting as well, what jumps out of the chart is the fact that we had a fifth wave extension in terms of the entire advance since 1784. What is even more interesting is the fact that the move from 1932 also sported a fifth wave extension. There is a very strong guideline in the wave principle that states that fifth wave extensions are typically followed by crashes. If one wants to search for examples commodities are a great place to start. The reason why commodities have dramatic crashes is because they follow a fifth wave extension. The guideline suggests that we can expect the decline to make it to the wave two of the fifth wave extension which would be below 1,000 on the DJIA. The fact that the 324 year cycle correction is due at this current point in time certainly supports this conclusion. Here is an example of a crash following a fifth wave extension [...]" More HERE + HERE

SPX vs Lunar Node's Speed

Market CITs are likely when the Lunar Node's Speed (degrees longitude/day) is at MIN/MAX and at 0.
The Eclipse Crash Window opens and closes around 21 days before and 21 days after the Solar- and Lunar Eclipses.
The table at left shows the nodal speed at MIN/MAX and at 0 during the next 30 days.
The Sun will conjunct the Lunar Node (North Node) on Sep 24 (Thu).
See also HERE + HERE

Future Ups and Downs into 2065 | Samuel Benner’s Prophecies

Samuel Benner was a farmer from Ohio who first published his prophecies about price fluctuations in 1875. The 19th century was the time of Laplacian probability, Gaussian distributions, Peano curves and Cantor set. While mathematicians were looking for structures in mathematics, Samuel Benner was studying and writing about a model of ‘Time’ to forecast the future. He lived in an era of Axe Houghton Indices, the time when the Chicago Board of Trade was established and agricultural commodity trading was active business. Society was busy with agriculture and expanding railroads. This is why his workings were based on pig iron, corn, cotton and hogs. Along with agriculture came the essential science of weather forecasting. What years would be dry or wet? When to expect years of heat, storm and cold? Agricultural statistics was compiled and used to establish demand and supply patterns. It was then 140 years back Benner wrote that the future cannot be calculated based on agricultural statistics. Statistics compilation would remain always poor, irregular, manipulable, undependable and non predictive. For Benner the axiom “history repeats itself” implies a cyclical movement in human affairs, and as it is a generally received opinion that everything moves in cycles, especially in nature. 

 

Prediction of the future can only be done by studying the past. History repeats itself with marvelous accuracy in detail from one panic year to another. Samuel Benner was the first to show how history repeated systematically. He was vocal about the cyclicality of financial catastrophes and his model illustrated the crisis' of 1891, 1902, 1910 and even 1929, 1987 and 2003. However, 2009 was a big miss in his set of nested cycles (exactly 20 Lunar Node Cycles after the 1637 Dutch Tulipomania bust). Time according to Benner was a pattern, a rule that did not change because of war, panic or elections. It was relentless in nature. It was periodical and not haphazard. The rule was unchangeable, determinable. Failures in business were connected with ignorance of ‘Time’. Today one can judge Samuel Benner as a farmer or a genius, but that would not change the fact that he was one of the first to see the mathematical hierarchy in ‘Time’. The story of the Benner’s work is intertwined with his personal experiences of bankruptcy. He was a prosperous farmer who was wiped out financially by the 1873 panic and then wanted to find out about the law of nature. He took the yearly average prices to smoothen the data. When he compared them he saw up and down yearly cycles repeating in a fixed sequence of a large cycle of 18-20-16 years and a small cycle of 9-10-8 years. The cycles low depicted reactions and depressions. According to Benner these were cast iron rules and he referred to them as ‘God in prices’.  

Benner discovered an 11 year cycle in corn and hog prices with alternating peaks at 4 and 6 year intervals. He also discovered an 11 year cycle peak in cotton prices and a 27 year cycle in pig iron prices with lows every 11, 9 and 7 years and peaks in a sequential order of 8, 9 and 10 years. He described a 54 Year Panic Cycle which arose from panics every 16, 18, 20 years, with this series repeating every 54 years, or as he explains, “it takes panics 54 years in their order to make a revolution or to return to the same order”. His book is one of the first examples of the development of cycles and periodicity theory in financial and commodity markets and was very popular amongst bankers and business men of the late 1800’s. His cycles and numerical sequences were effective throughout the 20th century, and can still be found to be operative today, predicting financial prices. Theorists will notice the similarities between his 11 year cycle and the sunspot cycle also of 11 years, something which has even been studied in current times by the Federal Reserve. Whether Benner was knowledgeable about this direct influence or not, he did make a connection through the weather and climate, and was likely aware of the earlier work on sunspots by Herschel, Jevons and others.

Benner never fully explained the basis of his cycle theories, but did state: "The cause producing the periodicity and length of these cycles may be found in our solar system … It may be a meteorological fact that Jupiter is the ruling element in our price cycles of natural productions; while also it may be suggested that Saturn exerts an influence regulating the cycles in manufacture and trade." Further, Uranus and Neptune: "may send forth an electric influence affecting Jupiter, Saturn and, in turn, the Earth … When certain combinations are ascertained which produce one legitimate invariable manifestation from an analysis of the operations of the combined solar system, we may be enabled to discover the cause producing our price cycles, and the length of their duration."

Later the larger 54 year cycle was also discussed in detail by Russian economist Kondratiev in 1925. Edward R. Dewey, Director of the Foundation for the Study of Cycles, assessed Benner's pig iron price forecasts over a 60 year period. Remarkably, he regarded this cycle as showing a gain - loss ratio of 45 to 1, which was “the most notable forecast of prices in existence”.

Extending and updating Samuel Benner's cycles and correlating them with more recent US-stock market prices, pointed to the low in 2003, the high in 2010, and the minor crisis in 2011. This would then be followed by a rising stock market into 2018 and a depression in 2021. 

2015 in the 56 Year Funk Cycle

SPX vs North Node | Louise McWhirter's Theory of Stock Market Forecasting

Louise McWhirter presented her theory in 1938 in "Astrology and Stock Market Forecasting" (p. 7-8) as follows:

“Whenever the North Node passes through Scorpio and Libra [2012-2015], there is a transition period as the curve passes from normal, going from normal to high.

[…] The high point of business volume is reached when the North Node transits Leo [2017-2018]. As the North Node goes through Cancer and Gemini, business volume is above normal, but slowly going to normal.

[…] Taurus [2003-2004] is the transition point or normal point as the curve goes from normal to below normal in business volume.

[…] When the North Node enters Aquarius [2007-2008], the low point of business activity has been reached. As the Node transits Capricorn [2009] and Sagittarius [2011], the normal position of the business curve is below normal going to normal.

[…] This is the natural position of the curve without the presence of secondary factors which can distort the curve favorably or unfavorably from one to twenty percent.

[…] The following secondary factors tend to lift the Business Curve:

(1) Jupiter conjunction the North Node. [2009, 2016, 2023]
(2] Saturn trine, sextile, or semi-sextile Uranus. [2002-2003, 2016-2017, 2025-2026]
(3) Jupiter in Gemini or Cancer. [2000-2005, 2030-2035]
(4) Jupiter conjunction, sextile or trine Saturn and Uranus, when in aspect to each other.
(5) The North Node in Gemini. [2013, 2016]
(6) Favorable aspects to Pluto. [2013, 2016]

[…] The following secondary factors have been found to depress the Business Curve:

(1) Saturn conjunction, square or opposition the North Node. [2013, 2016]
(2) Saturn conjunction, square, opposition, or semi-square Uranus. [2012-2013, 2021]
(3) Saturn in Gemini. [2000-2003, 2030-2032]
(4) Uranus in Gemini. [2025-2033]
(5) Uranus square, conjunction, or opposition the North Node. [Jan 2015, Jun 2018]
(6) Unfavorable aspects to Pluto.” [Jan 2015, Apr 2019]

As the Node moved through Capricorn (2010) and Sagittarius (2011) the general economy approached a very high level of activity in Scorpio (2012), and should peak as the Node passes through the sign of Leo (2017). 

However, W.D. Gann associated the period of the Node in Libra (2015) also with stock market panics (HERE). Moving through the signs of Cancer (2018) and Gemini (2020), the economic activity is still positive but beginning to slow to more normal levels. 

The above chart of the SPX and the North Node in the zodiac signs clearly shows that in the past this basic theory was not always properly reflected in the stock market's movements. This has to do with other important astronomical cycles, e.g. the 19.86 Year Jupiter-Saturn Cycle, 19 Year Metonic Cycle, the different natured 18.61 Year Lunar Declination Cycle, the 18 Year Saros Cycle or the varying lengths of the Solar Cycle. Additional important "secondary factors" could be the amazing activities of central banks, especially during the past 40 years. Nevertheless, empirical research discovered a multitude of other interesting economic sub-cycles of 17 to 20 years length, never out-ruled by any human intervention. The Wave Length Index of the Foundation for the Study of Cycles lists the following:
 

Credits: Foundation for the Study of Cycles (1964): Catalogue of Cycles - Part I.

The Skyscraper Indicator | Excuse me, while I kiss the sky ...

Cycles analyst Edward Dewey (1895-1978) was the chief economics analyst for the US Department of Commerce when he developed the "Skyscraper Indicator" in the 1940s: It correlates human optimism to the number of high-rise buildings under construction. When people are very optimistic, they tend to express their feelings in massive construction projects, especially very tall buildings, because they have a need to build toward the sky! Since this extreme optimism is reached at major market peaks, in the economy, severe economic downturns usually follow; not just declines in real estate prices. 

The world’s current tallest building, the Burj Khalifa in Dubai (828 m), nicely illustrates this process: It was built as a monument to the Gulf emirate’s boom in the middle years of last decade and opened in late 2009, just as the emirate plunged into financial crisis. These are the highest buildings in 2013:

World's Tallest Buildings 2013

And these are the tallest buildings currently under construction and expected to be complete before 2020:

Skyscrapers under Construction

It doesn't need a prophet to tell where the next bubbles are about to pop: Of all of the world's skyscrapers under construction, China is home to 53% of them and by 2016 China's highest buildings will exceed the 'One World Trade Center' (417 m) in New York by 200 meters. The boom is on though in mid 2013 the construction of the planned 838 meter Sky City in south-central China was halted by the authorities for not having a building permission. A similar craze for high rise has gripped South Korea and India. India just finished building two skyscrapers and has 14 skyscrapers currently under construction. However, having survived the Arab Spring miraculously, it is this decrepit royal kleptocracy in Saudi Arabia that is now giving thanks to each other by decorating Jeddah with a 1,007 meter high 'Kingdom Tower'.

Let's have a look at what happened during recent high times in different places: The construction of the Taipei 101 (508 m) began in 1999 and was completed in 2004. The duration coincided without the recession in the early 2000s and the tech bubble while in 2010 the completion of the Burj Khalifa coincided with the current global financial crisis. The Asian economic crisis, currency devaluation and speculation in stock and property coincided in 1997-1998 with the completion of the Petronas Towers (452 m), the tallest buildings in the world at the time. Now the Great 18-Year Real Estate Cycle will again be due to peak and pop around 2016. 

World's Tallest Buildings 2020 - Excuse me, while I kiss the sky ...