Economic cycles related to the stock market mostly correspond to solar sunspot cycles.

Economic cycles related to the stock market are mostly solar sunspot cycles. In fact, the Kondratiev wave is not the longest; the longest is the Gleissberg cycle, which refers to a long cycle change in the solar sunspot cycle, with a cycle of about 100 years, roughly two Jia Zi cycles. Some people may wonder what's the use of such a long cycle? Most people can't live that long, can they get rich by relying on this? Don't say, it can be done! If you had known about this cycle before and associated it with the Spanish flu from spring 1918 to spring 1920, you could predict the COVID-19 pandemic that started in 2020 and had invested heavily in the relevant pharmaceutical sector before, it would be hard not to get rich!

Some people may wonder what the relationship is between the great flu and the solar sunspot cycle? There is indeed a relationship, and it's a big one! Every major infectious disease is related to the solar sunspot cycle. In the figure below, the blue dots represent major infectious diseases, and the larger and darker the dot, the more severe it is. It can be seen from the figure that major infectious diseases in world history basically occurred in the years of solar sunspot extremes or before and after. The solar sunspot activity cycle not only affects the Earth's temperature, monsoons, atmospheric circulation, etc., but also the intensity of solar rays. The latter has a significant impact on the growth of bacteria and viruses. Different bacteria and viruses have different tolerances to solar rays. When the solar rays are too strong or too weak, the ecological balance of bacteria and viruses will be disrupted. Some bacteria or viruses will get extreme growth and reproduction opportunities, which will trigger major plagues. Not only is the century-long Gleissberg cycle related to major plagues, but the smaller solar sunspot cycles are also closely related to international infectious diseases.

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Sunspots are closely related to the Kondratiev cycle, and their numbers are negatively correlated with the Kondratiev cycle. That is to say, when the number of sunspots decreases over a long period, due to a lack of resources, climate deterioration, and frequent inflation, the Kondratiev wave is in an upward phase. On the contrary, when the number of sunspots increases over a long period, the climate will improve, resources become abundant, deflation is more likely to occur, and the Kondratiev wave becomes a downward phase.

Of course, 100 years and 60 years are too long. If you think that because of the economic cycle, there is only one opportunity in life, or even no opportunity, it would be too sad. The late "cycle king" Zhou Jintao said "life gets rich by Kondratiev," but other waves can also help you get rich. The solar sunspot cycle and its corresponding economic cycle and stock market cycle all have smaller cycles. We have also mentioned before that cycles are nested, and there are opportunities in large cycles and small cycles. For individuals, no matter which cycle's opportunity is seized, it is a great opportunity in life. Even if you can seize the opportunities of several small cycles, the superposition is more profitable than seizing the opportunity of a large cycle, because compound interest is more powerful.

Joseph Schumpeter is the economist who analyzes the Kondratiev cycle the best. He uses his innovation theory to decompose the Kondratiev cycle into four levels: the largest is the Kondratiev cycle, followed by the Kuznets cycle, then the Juglar cycle, and the smallest is the Kitchin cycle. A Kondratiev cycle is equal to 3 Kuznets cycles, 6 Juglar cycles, and 15 Kitchin cycles.

The Kuznets cycle, also known as the "construction cycle," is obviously also a real estate cycle, lasting 18 to 25 years, with an average of 20 years. Interestingly, this is basically in line with the Chinese traditional lunar calendar's 19-year 7 leap cycle, and it is also basically consistent with the Saros cycle. The Saros cycle is the cycle of solar and lunar eclipses, which refers to the time it takes for the moon to complete one orbit on its orbital disk (so that the moon's nodes complete one orbit along the orbit) - 223 synodic months, that is, 223 × 29.53059 days = 6,585.32157 days, which is 18 years and 11.32 days (if there are 5 leap years, it is 18 years and 10.32 days). It is 6,585.32 days, the Kitchin cycle is one-fifth the length of the Saros cycle, and the Kitchin cycle is 1,317.064 days. Sometimes the Kuznets cycle is extended, and there will be an additional Kitchin cycle or even a Juglar cycle.

The Juglar cycle is generally 7 to 11 years, between the Kuznets cycle and the Kitchin cycle, equal to 2 or 3 Kitchin cycles (the Juglar cycle composed of 2 Kitchin cycles and the Juglar cycle composed of 3 Kitchin cycles alternate), corresponding to the Schwabe cycle. The Schwabe cycle is a typical solar sunspot cycle, about 11 years. The Schwabe cycle does not completely correspond to the Juglar cycle, often missing a Kitchin cycle or an El Niño cycle.After discussing so much, what is the relationship between these cycles and the stock market?

By changing the original data of the Dow Jones Industrial Average to the deviation from the 11-year moving average, it facilitates comparison with the solar sunspot cycle. The arrows in the figure point to the historical peak points of the Dow Jones Industrial Average, each time it is one or two years earlier than the nearby, sometimes a lot earlier, and the average is 2.48 years. Both figures were made by Theodore Modes, the founder of Growth Dynamics. In May 2007, he used the solar sunspot cycle to predict that the Dow Jones Industrial Average would plummet in April 2008, leading to a financial crisis. Although the Dow Jones Industrial Average collapsed in 2007, the collapse of Lehman Brothers in September 2008 can also be considered a successful prediction.

The 24th solar sunspot cycle's maximum value is predicted to appear in April 2014. In February 2015, Mikhail Gorbachev, a senior economist at the International Monetary Fund, published a paper arguing that a global recession would occur by the end of 2015. Previously, Zhou Jintao predicted that the stock market was about to collapse. In June 2015, starting from China, the global stock market collapsed, and continued to fall until the spring of 2016.

However, some people may think that this is not very useful, as there is a difference of one or two years, and the time difference is not fixed. Many people are trying to solve this problem. Robert R. Prechter, the director of the American Institute for Social Economics, has researched some methods to predict the stock market using the solar sunspot cycle. The maximum value of solar sunspots is a bear market signal. When the maximum value of the sunspot cycle is about to arrive, the bear market is coming, or it will follow.He also found that on average, 26.5% of the distance from the lowest point of each Schwabe cycle, the lowest point of the U.S. stock market would appear, of course, the time for each occurrence is not fixed. III

It can be seen that cycles are useful, but they also require skill and the combination of several cycles and other tools to predict accurately. The sunspot cycle alone is obviously not enough, and the moon also needs to help.

(Note: The "iii" at the end of the first sentence seems to be a typographical error or a non-standard way of indicating a list item or section, so it has been left as is in the translation.)