1995issue C041-2
Regime filters for a dominant long wave
A dominant-long-wave is read from the joint state of the four-year-price-cycle and the interest-rate trend. A peak in the interest-rate-long-wave is treated as a warning-phase filter, not as an automatic equity top.
- The dominant-long-wave sits above short, intermediate, and four- to six-year swings and is described as lasting about 40 to 60 years.
- An interest-rate-long-wave of similar duration overlaps the equity wave rather than mapping to it in a simple direct or inverse way, as changing rates shift long-horizon capital between equities and bonds.
- Phase-offset places the equity long-wave peak many years after the corresponding interest-rate peak, so a rate top is not read as a completed equity downturn.
- The slower wave is classified as declining only when the four-year-price-cycle breaks below prior lows and business-cycle rates are also declining.
A slower wave above shorter swings
A slower market cycle is described beyond short, intermediate, and four- to six-year swings. That dominant-long-wave is said to last about 40 to 60 years, and it sits above those shorter price swings rather than replacing them.
Two long waves, related by overlap
The slower cycle is framed as being driven mainly by the price of money. Changing rates are said to shift long-horizon capital between equities and bonds.
Two long waves of similar duration are described, one in interest rates and one in equities. They are related by overlap rather than a simple direct or inverse mapping. The interest-rate-long-wave is a similarly long cycle in the price of money, shaped by shifts in monetary assets and liabilities. It conditions the equity long wave but does not lockstep with it.
Phase-offset after a rate peak
The equity long-wave peak is described as arriving many years after the corresponding interest-rate peak. That phase-offset is why a peak in rates is not treated as proof that the equity wave has already turned down.
How the joint state is classified
The four-year-price-cycle is the shorter equity swing used as a confirmation filter when judging whether the slower wave is still rising, in a warning-phase, or declining.
When four-year stock-price cycles make new highs and business-cycle interest rates are rising, the slower wave is classified as still rising.
When four-year stock-price cycles break below prior lows while business-cycle interest rates are still rising, the slower wave remains classified as rising.
When four-year stock-price cycles break above prior highs while business-cycle rates are declining, the slower wave is treated as still rising but under warning. That mixed regime is the warning-phase.
The slower wave is classified as declining only when four-year stock-price cycles break below prior lows and business-cycle rates are also declining. A later upturn waits for those rates to rise.
Historical warning readings
A mid-1990s reading treated a 1981 interest-rate peak followed by still-advancing equities as a warning-phase rather than a completed long-wave downturn.
A 1900-93 comparison of US long-term rates and a major equity average is used to show rates peaking nearly 10 years before the 1929 equity collapse.
Editorial reading
TradersWeek editorial: this archive workflow is taught here as a regime call. The direction of the dominant-long-wave is read from the joint state of the four-year-price-cycle and the interest-rate trend. Under that reading, a rate peak is a warning filter rather than an automatic equity top.
All readings on this track · 31 readings
- 1982Cycle phase windows for chart signal filters
- 1987Constructing a cycle-scaled trend oscillator
- 1987Constructing a dominant-cycle grid from marked lows
- 1988Cycle lead from staggered exponential averages
- 1988Auditing the forty-month stock-price cycle
- 1989When long-wave dominant cycles cannot be disproved
- 1991Half-cycle average plot shift versus cycle attenuation
- 1991Half-cycle average contact as an amplitude-ratio test
- 1993Building a restoring-pull indicator from cycle frequency and volume
- 1995Regime filters for a dominant long wave
- 1995A cycle-tuned lead filter from bounded oscillators
- 1998Testable cycle rules instead of fear and greed
- 1999Nested Euro cycle timing as one checkable procedure
- 2002Constructing an instantaneous trendline from a dominant cycle
- 2002Half-cycle center of gravity oscillator from moving-average balance
- 2004Testing a locked forty-week cycle with a hold-or-sit-out rule
- 2005Nested timing bands for dominant-cycle confirmation
- 2005Dominant-cycle baselines versus policy-news narratives
- 2006Pairing a dominant-cycle horizon with trend and oscillators
- 2006A dominant-cycle split into a trend filter and residual Relative Strength Index
- 2007Construct a momentum difference from the dominant cycle
- 2007Naive dominant-cycle rules fail without crowd tests
- 2012Constructing a dominant-cycle forecast as a timing window
- 2012Open-parameter construction of dominant-cycle baselines
- 2013Using a second-term election to check a predeclared dominant-cycle forecast
- 2014Constructing a dominant-cycle forecast baseline
- 2014Quotient transform as an early-onset trend filter
- 2014Construct a trough-to-trough cycle map with the Detrended Price Oscillator
- 2015Dominant-cycle alignment before an earnings catalyst
- 2017Causal reverse exponential average for cycle and trend
- 2020Constructing a cycle-plus-trend oscillator from a one-wavelength chord