Time ▾ Price ▴ Research: Foundation for the Study of Cycles

Showing posts with label Foundation for the Study of Cycles. Show all posts

Thursday, January 29, 2026

2026 Market Forecast: S&P 500, Crude, Notes, Gold, and Bitcoin | Bill Sarubbi

US Stock Market Outlook and Q1 Correction

The equity markets appear to be nearing a significant peak, with a forecasted correction for the S&P 500 expected to intensify during the first week of February. Despite this initial volatility, the year-end target for the S&P remains 10% to 12% higher than current levels around 6,950.

In November, the 15-month midterm election cycle will be the primary rally driver.

Sarubbi's market summary indicates a Q1 correction in the S&P, with the S&P expected to rise by 10%-12% in 2026. This will be followed by a trading range in Q2 and Q3, and a rally in Q4. November marks the beginning of the 15-month mid-term election year cycle. Oil is anticipated to rally, and foreign markets are projected to extend their outperformance.

Regarding the US stock market, there is a short-term cycle that runs into the last week of January, which expires just as a weak short-term cycle begins in the first week of February. February and March are likely to be weak. There will be a Q1 correction, likely starting in February, with Q2 and Q3 forming a trading range. Q4 in any year has been bullish, and the 15 months beginning with the mid-term elections have been one of the most bullish time intervals.

On the topic of bubbles, Sarubbi notes that they usually do not occur in years ending in a 6. Most crises have occurred in the autumn of years ending in 7 or 8. For instance, on August 15, 1971, Nixon closed the gold window. On March 31, 1980, Carter signed the Monetary Control Act, which enabled the Fed to monetize any paper. With few limits on what can be monetized, the Fed could theoretically inflate the currency to infinity. Consequently, there is no limit to price increases.

Bill Sarubbi expects the S&P 500 in 2026 to unfold in three phases: a weak first quarter, a sideways trading range through the spring and summer, and a powerful rally in the fourth quarter driven by the historically potent 15-month midterm election cycle.

2026 Composite Cycle for the S&P 500.

Sarubbi's "Composite Cycle for the S&P 500 in 2026" begins at a relatively high point in January 2026, followed by a general downward trend with minor oscillations through February and March. It experiences a slight dip in April, a modest recovery in May, and further undulations downward through June and July. A more pronounced decline occurs in August and September, reaching a notable low point around October or early November. From this trough, the US stock market ascends sharply through November and December 2026, continuing its upward trajectory into January 2027.

Above is the DJIA's expected return of all years ending in 6 that have also been 2 years past an election since 1885. Keep in mind that the 15-month period that follows the mid-term elections has been one of the most bullish time intervals. It appears logical to expect a Q1 correction followed by a trading range in the first 3 quarters of 2026.

Long-Term Cycles and Inflationary Pressures

Current economic conditions mirror the 54-year cycle last seen in 1972, characterized by persistent price inflation, social unrest, and rising interest rates. This environment of "excess liquidity" is evidenced by record-breaking prices for collectibles and comic books. Furthermore, the removal of the gold window in 1971 and subsequent monetary acts have removed traditional limits on currency monetization, explaining gold’s ascent toward the $5,000 mark.

Sector Rotation and Technology Moderation

A primary theme for 2026 is the transition of leadership away from the "Magnificent Seven" and toward undervalued sectors. While technology will remain relevant, leadership is shifting to names like Intel and Micron rather than the overextended market leaders.

Capital is expected to flow into healthcare, base materials, and emerging markets, the latter of which are breaking a 15-year relative downtrend against US equities.

Bullish Outlook for Energy and Oil

Oil presents a compelling "witches' brew" of bullish indicators: strong technical support between $50 and $55, extreme bearish sentiment, and favorable seasonal cycles.

Monthly Crude Oil Cycle.

A rally is anticipated through June, with stocks like ExxonMobil (XOM) and Schlumberger (SLB) showing classic technical breakout patterns. This sector stands to benefit most from the rotation of funds out of high-priced mega-cap tech.

Fixed Income, Gold, and Bitcoin

Fixed income remains unattractive, with the 10-year note facing strong seasonal headwinds in March.

10-Year Notes monthly histogram.

US Notes are at the start of one of the most bearish weeks in any year. Over the last 43 years, price has fallen 81% of the time from the 19th through the 25th. See the daily histogram of expected return for December above.

Gold.

Gold has exceeded recent objectives but is entering a seasonally weak period through March, with a projected short-term top near February 20. The gold cycle has peaked and the gold price has given an unmistakable signal. First, the rate of change became unsustainable. Then, in only 2 days, price has retraced 50% of its move from the October low.

The gold cycle has peaked and the gold price has given an unmistakable signal. First, the rate of change became unsustainable. Then, in only 2 days, price has retraced 50% of its move from the October low. It must fall to $4050 to retrace 38.2% of its entire 2025 move. The peak occurs on a day when a new Fed chairman has been announced. The new Fed chief has indicated that he will not continue to inflate the currency. The monthly cycle does not show a meaningful low until July.

Bitcoin.

Conversely, Bitcoin continues to adhere closely to its cyclical data, suggesting a potential rally toward the $110,000 to $115,000 range by April.

Reference:
Bill Sarubbi (January 23, 2026) - Market Forecast 2026. (video)

Monday, December 1, 2025

2026 High in the Benner Cycle | "Time to Sell Stocks and Values of all Kinds"

Samuel Benner (1832–1913), a once-prosperous farmer in Lawrence County, Ohio, whose wealth was destroyed by a devastating hog cholera epidemic and the Panic of 1873, devoted the remainder of his life to identifying recurring patterns in economic booms and busts. Through exhaustive analysis of commodity prices—specifically provisions (pork products such as bacon, ham, mess pork, lard, and salted pork), live hogs, corn, cotton, and pig iron (later also wheat and railroad-stocks)—he published "Benner's Prophecies of Future Ups and Downs in Prices" in 1876, a work that formed the basis for his annual forecasts through 1907.

» Periods When to Make Money. « The original 1872 business card of George Tritch Hardware Co., Denver, Colorado, is the focus of an ongoing controversy regarding its true origin—whether it was genuinely created by Tritch or popularized by Benner three years later in 1875.

» Periods When to Make Money. « The original 1872 business card of the George Tritch Hardware Co. in Denver, Colorado—which was copyrighted in 1883 and 1897—is the focus of an ongoing controversy: Was it genuinely created by Tritch, and simply plagiarized and popularized by Benner four years later in 1876?

Benner’s approach was empirical, grounded in price data from 1780 to 1872, and used to extend projections far into the future by emphasizing recurring cycles in commodity prices and business activity. He treated these cycles not merely as descriptive patterns but as prescriptive guidance, advising investors on when to buy during "hard times" and when to sell during "good times."

Benner's model identified nested cycles influencing commodity prices, agricultural yields, and broader business conditions. Central to his framework are the following patterns: ■ 27-Year Cycle in Pig Iron and Cotton Prices: Analyzing data from 1833 to 1899, Benner observed high prices following an ascending arithmetic progression of 8, 9, and 10 years, repeating every 27 years. Low prices, conversely, followed a descending series of 9 and 7 years. This cycle captured the volatility in industrial commodities like pig iron, which Benner viewed as a bellwether for economic health, given iron's role in manufacturing and infrastructure. ■ 11-Year Cycle in Corn and Hog Prices: Beginning in 1836, this cycle alternated between 5- and 6-year sub-periods, reflecting fluctuations in agricultural staples. Benner broke it into peaks and troughs that aligned with seasonal and weather-related disruptions. ■ Business Cycle with 16-18-20 Year Peaks: Extending his commodity analysis, Benner described a broader 11-year business rhythm, characterized by peaks spaced 16, 18, and 20 years apart. Lows coincided with pig iron troughs, while panics occurred at intervals averaging 9 years (7-11-9 pattern, akin to the Juglar cycle). Every third peak aligned roughly every 54 years, echoing longer waves like those later formalized by Nikolai Kondratieff. These cycles formed a hierarchical structure: shorter oscillations (5–11 years) drove immediate price swings, while longer ones (27 and 54 years) shaped multi-decade eras of prosperity or contraction. Benner integrated them into a single chart, forecasting "ups and downs" with directives such as "Years of Good Times: High Prices and the Time to Sell" for peaks and "Years of Hard Times: Low Prices and a Good Time to Buy" for troughs.

Benner's time-price model identified nested peaks and troughs in commodity prices, agricultural yields, and broader economic conditions. Central to his framework were the following patterns:

■ 27-Year Cycle in Pig Iron and Cotton Prices: Analyzing data from 1833 to 1899, Benner observed high prices following an ascending arithmetic progression of 8, 9, and 10 years, repeating every 27 years. Low prices, conversely, followed a descending series of 9 and 7 years. This cycle captured the volatility in industrial commodities like pig iron, which Benner viewed as a bellwether for economic health, given iron's role in manufacturing and infrastructure.
■ 11-Year Cycle in Corn and Hog Prices: Beginning in 1836, this cycle alternated between 5- and 6-year sub-periods, reflecting fluctuations in agricultural staples. Benner broke it into peaks and troughs that aligned with seasonal and weather-related disruptions.
■ Business Cycle with 16-18-20 Year Peaks: Extending his commodity analysis, Benner described a broader 11-year business rhythm, characterized by peaks spaced 16, 18, and 20 years apart. Lows coincided with pig iron troughs, while panics occurred at intervals averaging 9 years (7-11-9 pattern, akin to the Juglar cycle). Every third peak aligned roughly every 54 years, echoing longer waves like those later formalized by Nikolai Kondratieff.

Benner's astronomical time-price cycles theory.

These cycles formed a hierarchical structure: shorter oscillations (5–11 years) drove immediate price swings, while longer ones (27 and 54 years) shaped multi-decade eras of prosperity or contraction. Benner integrated them into a single chart, forecasting "ups and downs" with directives such as "Years of Good Times: High Prices and the Time to Sell" for peaks and "Years of Hard Times: Low Prices and a Good Time to Buy" for troughs.

For 2025, Benner’s cycle predicted the US stock market driving higher, for 2026, it forecasts a major stock market top: "High Prices and the Time to Sell Stocks and Values of All Kinds" into 2032 ("Years of Hard Times, Low Prices, and a Good Time to Buy Stocks"). In Benner's projection 2026 is marked as a "B" phase year — a peak of high prices and euphoria, often the culmination of a bull market before a shift to downturns. Historical "B" peaks have aligned (often within 1-2 years) with major tops like: 1929 (Great Depression peak), 2000 (dot-com bubble), 2007 (pre-2008 crisis), and others. 2026 is the final peak year, and should be followed by underperformance or bearish conditions into 2032.

» "B." [2026] Years of Good Times. High Prices and the Time to Sell Stocks and Values of All Kinds. «

For 2025, Benner’s cycle predicted the US stock market driving higher; for 2026, it forecasts a major top: "High Prices and the Time to Sell Stocks and Values of All Kinds" into 2032 ("Years of Hard Times, Low Prices, and a Good Time to Buy Stocks"). 2026 is marked as a "B" phase year — a peak of high prices and euphoria, often the culmination of a bull market before a shift to downturns. Historical "B" peaks have aligned (often within 1-2 years) with major tops like: 1929 (Great Depression peak), 2000 (dot-com bubble), 2007 (pre-2008 crisis), and others.

Benner attributed these periodicities to celestial mechanics, positing that solar system dynamics influenced earthly economies. He aligned his 11-year cycle with Jupiter's major equinox, which recurs every 11.86 years—a near-match to observed corn, hog, and business fluctuations from 1836, 1847, 1858, and 1869. Jupiter, in his view, served as the "ruling element" in natural product price cycles, potentially modulated by electromagnetic influences from Uranus and Neptune on Saturn and, in turn, Earth.

This astro-economic perspective echoed earlier hints by English economist William Stanley Jevons, who suggested in 1843 planetary configurations might underpin business cycles but abandoned the idea amid academic opposition. Modern interpretations extend this to lunar phases and solar activity (e.g., nodal precession, sunspot cycles), though Benner's original emphasis remained on observable price data rather than strict astronomy and astrology.

Benner's Cycle Forecast for the Period 2015–2035.

In 1948, Edward R. Dewey, director of the Foundation for the Study of Cycles, updated and reprinted Benner’s work as the Foundation’s "Reprint No. 24". He lauded Benner’s pig-iron forecasts over the 60-year period from 1875 to 1935 for achieving a gain-to-loss ratio of 45:1, deeming it one of the most reliable business charts despite numerous imitations by lesser-known authors. Proponents cite alignments with major events: the cycle's "B" peaks (high-price euphoria phases) approximated the 1929 stock market top preceding the Great Depression, the 2000 dot-com bust, and the 2007 pre-financial crisis summit—often within 1–2 years.

$Edward R. Dewey (1967) considered the true length of Benner’s pig iron price cycle to be 9.2 years and thus his "forecast got off the track by one year every five waves. By 1939 his projection was no longer usable." In 1971 Dewey commented: "Were Benner still alive and issuing yearly supplements to his Prophecies, he probably would have learned all that was necessary to know about cycles of fractional length and would have adjusted later forecasts accordingly."$

Edward R. Dewey (1967) considered the true length of Benner’s pig iron price cycle to be 9.2 years and thus his "forecast got off the track by one year every five waves. By 1939 his projection was no longer usable." In 1971 Dewey commented: "Were Benner still alive and issuing yearly supplements to his Prophecies, he probably would have learned all that was necessary to know about cycles of fractional length and would have adjusted later forecasts accordingly."

However, scrutiny reveals nuances: Benner's original chart, rooted in agriculture (which comprised 53% of the US economy in the 1870s), projected a 1927 high and 1930 low, not the exact 1929–1932 Depression timeline. A sensational 1933 Wall Street Journal article, designed to attract attention, altered Benner’s original cycle dates for dramatic effect, thereby fueling persistent misconceptions (see chart below).

Benner's original chart, rooted in agriculture (which comprised 53% of the US economy in the 1870s), projected a 1927 high and 1930 low, not the exact 1929–1932 Depression timeline. A 1933 Wall Street Journal reproduction altered these dates for dramatic effect, fueling misconceptions.

Martin Armstrong recently contended that Benner’s cycle was more a historical curiosity than a reliable predictive tool, noting that it has been both right and wrong many times:

The claim that Benner’s Cycle predicted the Great Depression is false. The chart [above] that was published in the Wall Street Journal altered Samuel Benner’s cycle, which was based on agriculture. It predicted a high in 1927, not 1929, and the low in 1930, not 1932. Claims that Benner’s work calls for a crash in 2025 are flat-out wrong. His target years would be 2019 and 2035, based on his data, not the altered, fake news published by the Wall Street Journal in 1933.

Benner was a farmer. Applying his cycle to the economy today is no longer effective, any more than the Kondratieff Wave. Both were based on the economy, with agriculture being the #1 sector. As the Industrial Revolution unfolded, those cycles remain relevant for commodities, but not the economy. Agriculture, when Benner developed his model, accounted for 53% of the economy. Today it is 3%. If they were alive today, they would have used the services industry. Capital flows are still pointing to the dollar, given the prospect of war and sovereign defaults outside the USA.

Martin Armstrong, August 30, 2025.

Thursday, October 2, 2025

Unlocking the "Years-Ending-in-5" Market Signal | Jake Bernstein

One of the most reliable patterns I’ve observed in markets appears in years ending in the number five. It is simple: take the January high of the Dow Jones Industrial Average. If the market records two consecutive monthly closes above that high, history shows a strong rally often follows into early December or even year-end. This is a purely mechanical setup; without the two closes, the pattern remains dormant.

Detrended Weekly Seasonal Composite Future chart for the S&P 500 from 1942 to 2024.

Looking back, the results are striking. In 1995, the trigger led to a more than twenty percent advance. 1985 produced roughly fifteen percent, 1975 seven to ten percent, and even 1965, after a brief pullback, ended higher by about five percent. Earlier examples include 1955 with fifteen percent, and 1935 and 1945 each with nearly thirty percent rallies. Not every “five” year triggers the setup—as in 2005 and 2015—but when it does, the outcome has consistently favored the bulls.

Dow Jones (monthly bars), 2025.

» If the market records two consecutive monthly closes above the January high, history shows a strong rally often follows into year-end. This is a purely mechanical setup; without the two closes, the pattern remains dormant. «

In 2025, we already have one monthly close above the January high [¿?]. If October confirms with a second [¿? would be the third], the trigger will be set. With only November and December remaining, history suggests that these final months could deliver substantial gains, just as in previous “five” years.

Not every “5” year produces a trigger (e.g., 2015, 2005),

but when it does, the outcome has often been significant.

The pattern is neither perfect nor guaranteed, but the Dow’s record demonstrates that when it occurs, the probabilities strongly favor a significant year-end advance.

Reference:
Jake Bernstein (October 2, 2025) - Unlocking the Years-Ending-in-5 Market Signal. (video)

Detrended Weekly Seasonal Composite for the S&P 500 from 2001 to 2025.

Friday, November 1, 2024

The 41-Month Kitchin Cycle Topping Patterns in US Stocks | Lars von Thienen

The weekly S&P 500 shows that the nominal 180-week cycle, currently at 177 weeks, is in an early topping stage. This long-awaited time cycle has been monitored since the end of 2023 and has been cited as a key driver for the upturn lasting into this window. Now that we have arrived at this point, we need to pay close attention to the shorter-term cycles and technical indicators.

Weekly S&P 500 with nominal 180 weeks / 41-Month Kitchin Cycle topping | October 23, 2024

Before moving to the daily cycle analysis, it is worth noting that the cyclic-tuned RSI indicator has reached the upper band, indicating a "bull exhaustion" mode. This condition can turn within days into a "bulls tired" and/or "bulls exit" state, signaling that we are primed for a longer-term reversal. The same weekly cycles situation can be observed on the NASDAQ.

NASDAQ weekly cycles | October 23, 2024

Let's now examine the daily cycles, starting with the S&P 500 model.

» The daily composite model suggests a topping pattern either now or potentially by the end of the year. «

S&P 500 daily dominant cycles model | October 23, 2024

The main cycles are the 192-day and the harmonic 89-day trading cycles. The daily composite model suggests a topping pattern either now or potentially by the end of the year. The cRSI indicator shows we are nearing the upper band, which could also signal a final year-end rally before both daily cycles align with the downward-trending weekly cycle noted earlier. A similar perspective can be observed in the Nasdaq daily data.

Nasdaq Composite daily dominant cycles model | October 23, 2024

The shorter-term daily cycles with lengths of 80 and 200 trading days on the Nasdaq model are rolling over now and will likely continue into the end of 2024. These cycles are also coming into alignment with the next long-term downward swing, which is in sync with the long-term cycles shown earlier.

It's worth noting that we're seeing a divergence forming, as the market experienced a clear topping pattern in June of this year: At that time, the composite model peaked while the cRSI was breaking down below the upper band, issuing a sell signal. The price never went back to achieve a higher high, and the cRSI is indicating an even bigger divergence between the price action and the signal line. The technical indicators shown below have been adjusted to the cycles detected and mentioned above. The highlighted red or green shaded areas indicate that the higher timeframe - here the weekly S&P 500 - is also taken into consideration.

S&P 500 - cRSI cyclic indicator | October 23, 2024

The multi-timeframe cyclic technical indicator is showing a clear divergence between price and the signal. While the weekly chart confirms another overbought situation at the time the divergence signal emerges, this provides technical confirmation of a possible top in place. A similar technical condition can be observed on the NASDAQ.