INTERVIEWQ: What is the basis for the market's cycles?
A: Mathematics has been defined as the most precise language. Consequently, the mathematically based cycles are an orderly conduit though which the market conveys its directional behavior. In effect, my methodology tracks the least common denominator, which is time. I believe the market itself is the ultimate authoritative opinion. With an understanding of the cycles, the sequential series can be applied to both yearly for investment purposes, or weekly for interim-oriented traders.Q: You place a lot of weight on the Fibonacci numerical sequence in your cycle work, don't you?
A: Yes. Let me give you just one example of how important the Fibinoacci sequence is. A deck of cards is constituted similar to a year: 52 cards (weeks), four suits (seasons), 13 cards in a suit (weeks in a season). The numbered cards begin with two, the basic prime number, and end in 10, a decade. The width of a conventional deck is 5/8 of the length (two Fibonacci numbers), the beginning of the 62% odd infinitum ratio. Fibonacci numerology is clearly evident in various aspects of life. Whenever a bear market or contracting economy occurs, the blame game begins. However, this is a futile exercise for “it's all in the cards.”
. . .Q: Earlier this month you published a special edition to your SineScope publication entitled, “The Grand Bull's Terminal Years: 2009-2011.” It contained an ominous warning for the years 2012-2014. Please elaborate.
A: The term “Grand” was included since it refers to the composite of all the cycles. Its duration is 120 years and I refer to it as the revolutionary cycle. A revolution occurs with each cycle bottom which changes the three basic institutions that govern our lives: political, economic and social. The first revolution in this country was political since it involved war in the 1770s when America was freed from an occupied to an independent territory. The second occurred in the mid 1890s when America transcended from an agricultural-based to a manufacturing-based economy. This was an economic revolution. The third 120-year revolutionary cycle is scheduled to bottom in 2014. To complete the third institution, the upcoming Grand cycle bottom should be a social revolution. The final three years prior to the bottom are ominous, historically, for they include a depression and a devastating war.
Since “history always repeats itself” and there is yet to be a precedent to violate this, the years 2012, '13 and '14 have grave, broad-based implications. The various potential is too lengthy to discuss now but they are discussed in the Special Edition.Q: If an investor shares your conclusions based on the 120-year revolutionary cycle, what is the best strategy for the years ahead?
A: The answer is very simple and straightforward. Liquidate all conventional equities on strength in 2011. Notwithstanding the negative potential that exists during 2012-2014, funds can be 100% committed and produce gainful returns. However, the old generals who have fought the old wars during the past half century with the “buy and hold for the long term” philosophy will have to change their mindset. I have difficulty with this approach, for long term we're all dead. It appears that this is a rationalistic euphemism for the inability to manage and avoid interim risk, thereby awaiting the market to recover the investor's loss.
Part 2: http://www.marketora...rticle8511.html