BEAR 2025 IN NUMBERS (2.0)🐻 In my May post last year about the U.S. stock market’s mid-term cycle, I promised to estimate the probable amplitude of the forecasted correction in the current cycle.
"When should we expect the bottom of the current 4-year cycle? If we are near the top, considering the current 20-week base cycle that has just begun, we can preliminarily talk about October-November 2024. The average correction from the top of a 4-year cycle ranges from 20% to 50%. Once the cycle’s peak is reached, we will be able to estimate the approximate correction level."
👉 I already made a numerical forecast in early September, but it turned out to be premature. Another base cycle was needed to form the peak of the long cycle, which is now in the correction phase.
☝️ Assuming that:
🔸 The December 9 extreme forecast, made at the beginning of 2024, became the peak of the 4-year and 50-week cycles. On the futures chart, this level is the absolute maximum—see the futures chart.
🔸 The double top of the current 20-week base cycle at the January 29 extreme forecast confirmed the end of the 4-year trend.
This level can be taken as the starting point for calculating target correction levels.
☝️ The calculation is based on technical support levels and the following assumptions:
1️⃣ The average correction from the top of a 4-year cycle ranges from 20% to 50%.
2️⃣ When coinciding with the 4-year cycle, the final phase of the 50-week DJIA cycle often tests or breaks the low of the previous 50-week cycle.
3️⃣ The start of a new 4-year cycle will be bullish. Ahead of a more severe crash in the next 1.5 years due to the 7-year crisis cycle, the risk of a stock market drop greater than 25% in the current base cycle is low.
👉 The resulting target levels are:
🔸 **DJIA** -17% to 1st level **38,000**
🔸 **DJIA** -20% to 2nd level **36,000**
🔸 **SPX** -20% to 1st level **4,900**
🔸 **SPX** -25% to 2nd level **4,600**
⚠️ The current 4-year cycle has clearly been prolonged, resembling the situation during the 1987 crash. The next 4-year cycle may be shortened to 3.5 years.
Remember that the new 4-year cycle should complete the current 7-year crisis cycle, bottoming out in 2028, with tops in summer 2025 and spring 2026. The timing is perfect so far.
