David Hickson has kindly invited me to join Hurst cycles once again. For those that don’t know me, I am a long time student of cycles and run the Cycles Research Institute web site at http://www.cyclesresearchinstitute.org/ while my personal website is http://ray.tomes.biz/ and I have lots of videos on cycles in YouTube under the Wobbly Universe playlist https://www.youtube.com/playlist?list=PL804B5A8D2E390874 which includes other peoples cycles videos also.
Last November I gave two talks on Harmonics Theory at NPA (Natural Philosophy Alliance) in Baltimore, one on background to the theory and one on predictions and explanations. These talks are available as PDF documents at https://cyclesresearchinstitute.wordpress.com/2014/11/18/ray-tomes-speaking-at-npa-conference-in-baltimore/ and as video at https://www.youtube.com/watch?v=XqXFE1p6fv0 and https://www.youtube.com/watch?v=pQXdJ3ijC7o (there is a slight problem with picture in the later part of second talk but the sound and graphic overlays are OK). You will find material relevant to markets scattered through the talks as well as (I hope) a wider understanding of why the Universe is like this.
I have followed all of David’s implementation of Hurst’s work with great interest. Hurst was the father of computer use for trading cycles. His findings are complimentary to those of Edward R Dewey who started the Foundation for the Study of Cycles. In particular, the pattern of cycles with periods in ratio 2 and 3.
4 thoughts on “Ray Tomes and Harmonics Theory”
Hi Ray. Great to see you here! Look forward to your posts.
Hi Ray,
I spent some time viewing your videos yesterday which made for interesting viewing. What I would love to know is your opinion on our possible position within the Kondratieff Wave? We have had all the elements of Autumn with ridiculous central bank largesse etc. Are we travelling a strange path through winter now?
Thanks
David
If we work backwards in steps of 53 to 54 years (but cycle may range from 50 to 60 years at least) then we are at equivalent poi8nt to 1962 and 1908 about. The winters of Kondratieff I would think got really going in 1975 and 1929. So we are 13 to 21 years away for that. But there were shocks in 1967 and about 1920 I think, so maybe just 5 to 12 years away. So there ought to be some balmy autumn weather for a little while yet.
When it comes to stock markets however they don’t entirely follow Kondratieff which is more about about cycles in commodity prices. The 35.5 year (and therefore also 71 year) cycles have been quite good at predicting long term events. Compare 2000 NASDAQ behaviour to 1929 Dow. This is a comment I made in 2009 in cyclesi discussion group on Yahoo:
“Up until now, whenever people compared the present to the 1929 and
onwards events, I was always thinking to compare 1929 to 2007 and it
didn’t seem to match. However when 1929 is compared to 2000 the match is
rather good. Also the time displacement of 78 years then becomes 71
years and makes much more sense for many cycles being in exactly the
same phase.
I don’t think it is all that important whether 2000 or 20007 went higher
in index terms, as it is a double top either way. Some of the graphs
that I was looking at were based on inflation adjusted index or on P/E
ratios. Once you do either of these then the 2000 peak is clearly the
top and the correct comparison can be made.
I see this as a great confirmation of Dewey’s table of common cycles
periods with ratios of 2 and 3. However we should always remember that
not all the common cycles period fit that table, for example the 9.6
year cycle and the 3.39 year (40.68 month) cycle. However when we go to
a base of 71 years rather than 35.5 years then we find 71 / 3 / 7 = 3.38
years. There is another whole group of cycles with ratios 2 and 3
following on from that period just like Dewey’s fractional periods from
the 35.5 year period. For example the 10 month cycle and others. That
group based on 71 years / 21 also contains matches to many shorter solar
and other astronomical cycles. All of those cycles will be in the same
phase after 71 years, but many will not be after 35.5 years. However the
9.6 years cycle and some others will be in a different relative phase in
each 35.5 year and 71 year period. This explains why the alternate 35.5
year periods are more similar but not exactly the same.”
A further post I made back in 2009.
“In Edward Deweys table of cycles based on a starting point of 35.5 years and with multiples of 2 and 3 in each direction and including periods of: 71, 35.5, 17.75, 8.88, 4.44, 11.83, 5.92, 2.96, 1.48, 0.74, 3.94, 1.97, 0.99, 0.49, 0.66 and 0.33 years. A look at the US stock market over the last 138 years shows four clear cycles of possibly 35.5 years each. Alternate cycles are quite different though, with the peaks around 1900 and 1966 being rather more rounded with less choppy tops and the 1929 and 2000 peaks being very pointy at the top and very choppy also. Why should this be so?
US Stock Market from 1871-January until 2009 August, S&P on log scale
I think that the answer to this question is that although Dewey’s periods (apart from the ones longer than 35.5 years) are all exact fractions of 35.5 years. However in my table of harmonics, the periods 23.7 years and 7.9 years also occur, being odd fractions of 71 years. That means that they have opposite phase in alternate 35.5 year periods. In particular the 7.9 year period (71 years / 9) and the 8.88 year period (71 years / 8) cancel each other out in the 1900 and 1966 peak periods but add together in the 1929 and 2000 peak periods.
This hypothesis is well supported by looking at the graph above. In the 1900 and 1966 year peaks the dominant cycles are clearly in the 3 to 4 year range. However at the 1929 and 2000 year peaks, the dominat periosdi s about 8 years. In particular, we can compare the peaks and troughs as being + in1929, – in 1932, + in 1937 and – in 1942. Then later we have + in 2000, – in 2003, + in 2007 and a prediction made here of a – in late 2012 or early 2013. Putting the two graphs over each other on a log scale and displaced 71 years looks like this:
The “big bottom” for the cycle could be 2012-December or 2013-March. The Mayan cycle folk should be happy about that first possible date.
One further clue should be that interest rates should begin to rise just before the US Stock Market takes off.”