Skip to main content
Track Dominant cycle detection
25 / 31
Search the archiveLibrary
Library

2013issue C0414-21

Using a second-term election to check a predeclared dominant-cycle forecast

A historical case study asked why major US equity indexes sold off in the week after a reelection instead of continuing a long-wave advance already used to explain a second term. The working comparison keeps a k-wave baseline in view and treats political calendars as overlays in an out-of-sample-check.

  • A long-wave rise that was already used to explain a second term can be retested in the price window after the vote.
  • The explicit quantitative baseline was a k-wave chart with an S&P 500 overlay through a stated sample date, not the political story of reelection week.
  • A presidential-cycle and a fed-chairmanship-cycle can be added to the same chart to test whether other calendars explain the same movement.
  • Editorial: isolate dominant-cycle turning points from noisy political overlays, then compare the stated baseline with what prices did after the vote.
Entries in this reading1 entry
Current trackDominant cycle detection119 readings

A cycle call already on the record

A prior cycle study had already treated a long-wave rise as the reason a sitting president would win a second term. After the reelection, the same study asked why major US equity indexes sold off the following week instead of continuing the previously forecasted advance.

That later window is the out-of-sample-check: a later price window used to test whether a cycle call made before the event still described the path after the event.

The k-wave as the stated baseline

The case study used an updated long-wave chart with an S&P 500 overlay through a stated sample date as the explicit quantitative baseline. In the terminology of this article, that chart is the k-wave.

On that overlay the index was described as following the suggested upward path, but with substantial volatility attributed to fiscal-cliff uncertainty and political conflict.

Political calendars as overlays

A presidential-cycle is a four-year political calendar used as a secondary overlay when asking whether a reelection week should have continued or interrupted a predeclared market path. The author treated the presidential-election and stock-market relationship as historically strong but not guaranteed to repeat the same way in every cycle.

A fed-chairmanship-cycle was added to the same chart to test whether that second calendar helped explain the observed market movement. The overlay is a leadership-tenure calendar on the same path, not a substitute for the long-wave baseline.

What the archive treated as predictive

After reviewing politics, changing Fed chairs under different presidents, and the presidential-cycle overlay, the author concluded that only the long-wave turning-point pattern predicted the future path.

That long-wave model was described as ignoring volatility inside a bullish or bearish trend and focusing only on the turning points.

S&P 500 across U.S. presidential terms, 1980–2012

The index advanced from the low 100s in 1980 into twin peaks near 1500–1550 in 2000 and 2007, then stalled after the 2012 reelection instead of breaking out. Path and levels were read from the published Advanced GET candlestick overlay of the S&P 500 through 30 November 2012; that print quotes a last close of 1359.90 and labels the October 2002 low at 814.41.
The index advanced from the low 100s in 1980 into twin peaks near 1500–1550 in 2000 and 2007, then stalled after the 2012 reelection instead of breaking out. Path and levels were read from the published Advanced GET candlestick overlay of the S&P 500 through 30 November 2012; that print quotes a last close of 1359.90 and labels the October 2002 low at 814.41.S&P 500 · Daily · 1980-01-01T00:00:00.000Z to 2012-11-30T00:00:00.000Z

Y-scale on the print runs from 0 to 1600. Digitized closes are approximate readings against that scale, except the labeled 814.41 low and the 30 November 2012 quote. Early-1980s bars are compressed, so those points are the coarsest. The source also drew 13-, 40- and 80-period moving averages and an Elliott wave count; those overlays were not converted.

Editorial reading of the workflow

Editorial: treat a second-term election as an out-of-sample-check on a predeclared cycle forecast. Isolate the dominant-cycle turning points from noisy political overlays, keep the presidential-cycle and the fed-chairmanship-cycle as secondary calendars, and compare the stated k-wave baseline with what prices actually did after the vote.

Editorial: the archive described that historical workflow and still assigned the later path to long-wave turning points. It did not present the isolation step as a standing rule for later elections.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
25 of 31 in the Dominant cycle detection track
201462-64 pp.Next on Dominant cycle detectionConstructing a dominant-cycle forecast baselineA dominant cycle is the single strongest periodic component estimated from an ordered market series inside a stated lookback.
All readings on this track · 31 readings
  1. 1982Cycle phase windows for chart signal filters
  2. 1987Constructing a cycle-scaled trend oscillator
  3. 1987Constructing a dominant-cycle grid from marked lows
  4. 1988Cycle lead from staggered exponential averages
  5. 1988Auditing the forty-month stock-price cycle
  6. 1989When long-wave dominant cycles cannot be disproved
  7. 1991Half-cycle average plot shift versus cycle attenuation
  8. 1991Half-cycle average contact as an amplitude-ratio test
  9. 1993Building a restoring-pull indicator from cycle frequency and volume
  10. 1995Regime filters for a dominant long wave
  11. 1995A cycle-tuned lead filter from bounded oscillators
  12. 1998Testable cycle rules instead of fear and greed
  13. 1999Nested Euro cycle timing as one checkable procedure
  14. 2002Constructing an instantaneous trendline from a dominant cycle
  15. 2002Half-cycle center of gravity oscillator from moving-average balance
  16. 2004Testing a locked forty-week cycle with a hold-or-sit-out rule
  17. 2005Nested timing bands for dominant-cycle confirmation
  18. 2005Dominant-cycle baselines versus policy-news narratives
  19. 2006Pairing a dominant-cycle horizon with trend and oscillators
  20. 2006A dominant-cycle split into a trend filter and residual Relative Strength Index
  21. 2007Construct a momentum difference from the dominant cycle
  22. 2007Naive dominant-cycle rules fail without crowd tests
  23. 2012Constructing a dominant-cycle forecast as a timing window
  24. 2012Open-parameter construction of dominant-cycle baselines
  25. 2013Using a second-term election to check a predeclared dominant-cycle forecast
  26. 2014Constructing a dominant-cycle forecast baseline
  27. 2014Quotient transform as an early-onset trend filter
  28. 2014Construct a trough-to-trough cycle map with the Detrended Price Oscillator
  29. 2015Dominant-cycle alignment before an earnings catalyst
  30. 2017Causal reverse exponential average for cycle and trend
  31. 2020Constructing a cycle-plus-trend oscillator from a one-wavelength chord
By fieldCycles and spectral analysis77 readingsBy year201398 readings
All 119 readings tagged Dominant cycle detection
Also on Dominant cycle detection5 readings
1982Cycle phase windows for chart signal filters1982Scale-free Commodity Channel Index construction1984How to construct a maximum-entropy cycle model1984Constructing maximum-entropy spectra for dominant-cycle forecasts1984Half-cycle differencing for momentum signals