1. MTA Educational Foundation University Course – Technical Analysis of the Financial Markets © 2011 Lecture 7 - Theory of Stock Market Cycles This lecture series is produced by the Market Technicians Association Educational Foundation Copyright © 2011. All rights are reserved. 1 12-17-10 Schematic model intended to Indicate trend and cyclical rhythm time frames and not absolute levels of price magnitude Stock Market Cycles Schematic model intended to indicate trend and cyclical rhythm time frames and not absolute levels of price magnitude Short-Term Trend Structure Long-Term Trend Structure Intermediate-Term Trend Structure Accumulation Zone Distribution Zone

2. MTA Educational Foundation University Course – Technical Analysis of the Financial Markets © 2011 Lecture 7 - Theory of Stock Market Cycles This lecture series is produced by the Market Technicians Association Educational Foundation Copyright © 2011. All rights are reserved. 2 12-17-10 The Amplitude of a Wave

3. MTA Educational Foundation University Course – Technical Analysis of the Financial Markets © 2011 Lecture 7 - Theory of Stock Market Cycles This lecture series is produced by the Market Technicians Association Educational Foundation Copyright © 2011. All rights are reserved. 3 12-17-10 The Period of a Wave

4. MTA Educational Foundation University Course – Technical Analysis of the Financial Markets © 2011 Lecture 7 - Theory of Stock Market Cycles This lecture series is produced by the Market Technicians Association Educational Foundation Copyright © 2011. All rights are reserved. 4 12-17-10 The Phase Difference Between 2 Waves

5. MTA Educational Foundation University Course – Technical Analysis of the Financial Markets © 2011 Lecture 7 - Theory of Stock Market Cycles This lecture series is produced by the Market Technicians Association Educational Foundation Copyright © 2011. All rights are reserved. 5 12-17-10 The Summation of 2 Waves

6. MTA Educational Foundation University Course – Technical Analysis of the Financial Markets © 2011 Lecture 7 - Theory of Stock Market Cycles This lecture series is produced by the Market Technicians Association Educational Foundation Copyright © 2011. All rights are reserved. 6 12-17-10 Lacking Harmonicity

7. MTA Educational Foundation University Course – Technical Analysis of the Financial Markets © 2011 Lecture 7 - Theory of Stock Market Cycles This lecture series is produced by the Market Technicians Association Educational Foundation Copyright © 2011. All rights are reserved. 7 12-17-10 Lacking Synchonicity

8. MTA Educational Foundation University Course – Technical Analysis of the Financial Markets © 2011 Lecture 7 - Theory of Stock Market Cycles This lecture series is produced by the Market Technicians Association Educational Foundation Copyright © 2011. All rights are reserved. 8 12-17-10 Lacking Harmonicity & Synchonicity

9. MTA Educational Foundation University Course – Technical Analysis of the Financial Markets © 2011 Lecture 7 - Theory of Stock Market Cycles This lecture series is produced by the Market Technicians Association Educational Foundation Copyright © 2011. All rights are reserved. 9 12-17-10 DJIA Quarterly Hi-Lo, illustrating 4-4 /1/2 Year Cycle. Avg. Duration: Last 8 cycles 1949-1982 is 49.8 months. Avg. Bull Phase Skew is 35.4 months; Avg. Bear Phase Skew is 14.4 months. Kitchin Wave

10. MTA Educational Foundation University Course – Technical Analysis of the Financial Markets © 2011 Lecture 7 - Theory of Stock Market Cycles This lecture series is produced by the Market Technicians Association Educational Foundation Copyright © 2011. All rights are reserved. 10 12-17-10 Edward Dewey 9.2-Year Cycle in Stock Prices 1830-1966

11. MTA Educational Foundation University Course – Technical Analysis of the Financial Markets © 2011 Lecture 7 - Theory of Stock Market Cycles This lecture series is produced by the Market Technicians Association Educational Foundation Copyright © 2011. All rights are reserved. 11 12-17-10 Kondratieff’s Long Wave

12. MTA Educational Foundation University Course – Technical Analysis of the Financial Markets © 2011 Lecture 7 - Theory of Stock Market Cycles This lecture series is produced by the Market Technicians Association Educational Foundation Copyright © 2011. All rights are reserved. 12 12-17-10 Schumpeter’s Model – The 19th Century Business Model

13. MTA Educational Foundation University Course – Technical Analysis of the Financial Markets © 2011 Lecture 7 - Theory of Stock Market Cycles This lecture series is produced by the Market Technicians Association Educational Foundation Copyright © 2011. All rights are reserved. 13 12-17-10 Sun Spots

14. MTA Educational Foundation University Course – Technical Analysis of the Financial Markets © 2011 Lecture 7 - Theory of Stock Market Cycles This lecture series is produced by the Market Technicians Association Educational Foundation Copyright © 2011. All rights are reserved. 14 12-17-10 Structure of an Ideal Elliott Wave

15. MTA Educational Foundation University Course – Technical Analysis of the Financial Markets © 2011 Lecture 7 - Theory of Stock Market Cycles This lecture series is produced by the Market Technicians Association Educational Foundation Copyright © 2011. All rights are reserved. 15 12-17-10 Seasonal Cycles November Soybeans (CBOT) 15-Year Seasonal (1983-1997)

16. MTA Educational Foundation University Course – Technical Analysis of the Financial Markets © 2011 Lecture 7 - Theory of Stock Market Cycles This lecture series is produced by the Market Technicians Association Educational Foundation Copyright © 2011. All rights are reserved. 16 12-17-10 Seasonal Cycles – Market Performance Each Month of the Year (57-1/3 Years - January 1950 - April 2007) Average month-to-month % change in S&P 500 (based on monthly closing prices)