Monday, July 23, 2012

2012.07.20 Weekly Cycle Charts









































The predictive curves of the short-term cycle models for the DJIA, Gold, Silver and the Amex Oil Index are all showing strong downward trends for this week going to the end of July. The Amex Oil Index is set to make a multidecadal low by the end of July, followed by a strong uptrend for the rest of the year.

I am pressed for time and will provide the longer term models only at the beginning of each month. My apologies are extended  if this causes readers any inconvenience.

4 comments:

Anonymous said...

Incredible story there. What occurred after? Take care!
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Rajeev Bharol said...

What happened? No updates for long time now.

Rajeev Bharol said...

What happened? No updates for long time.

Paolo said...

Hi Rajeev, thanks for checking in! First off, my sincere apologies to readers such as yourself for my sparseness over the past 6 months. I have not posted any additional cycle models because their rate of error was increasing and unacceptable.

One of the cycle model inputs, a cyclical model of its own relating the yield curve spread and rate of change of US monetary aggregates is worse than useless and was contributing to the increasing error.

I have also dropped all inputs regarding employment data from the US BLS. The increasing second-degree fluctuation of their short-term variance convinced me that the set of data I was using contained more noise than information.

I have been slowly rebuilding the cycle models, which are now less complex as a result of the input data pruning. I'll try to post them before Dec. 21. I have one for the DJIA, which is almost ready.

The academic question is not whether the Fed actions can change business cycles, but by how much and over what time window. Right now, it looks like the long-term cycles > 8 years amplitude are stable since 1896, and it is the noise in the shorter cycles that created the error in the previous model version beginning around early 2010.