The 40.68-month stock price cycle
by Gertrude Shirk
Of the thousands of possible rhythmic cycles in hundreds of subjects that the Foundation for the Study
of Cycles has studied over the years, one we have reported on repeatedly since November 1951 is the
40.68-month cycle in stock prices.
Cycle analysts were aware of a rhythm in stock market averages of about 40 to 41 months (from crest to
crest) for many, many years. Over a long period of time, this cycle was dominant enough to be visible by
inspection of the data, before trend removal or any other manipulation came into use. The Foundation has
tracked the history of this cycle since it was first defined, whether or not the market matched the ideal
The Foundation does not forecast stock prices based on our research, but we constantly bring any cycle
up-to-date because an important part of our evaluation of the reality and significance of the cycle is the
degree to which it continues after it is found and defined. There is no standard test that I know of by
which the statistical significance of the continuation after discovery can be measured. But it is certainly
common sense to attach a high degree of significance to a cycle which continues to follow the extension
of the average pattern of the past.