Looking At 10-Year Stock Price Patterns
by Lewis Carl Mokrasch, Ph.D.
Many temporal cycles have some influence on the stock and commodity markets. One, the decennial
pattern, receives more attention near the beginning and end of decades. Studying stock market price
patterns anew presents some new conclusions.
From a report written by actuary W.S. Jevons in 1884, economist E.L. Smith obtained the critical clue he
had sought concerning the cyclical behavior of investment instruments. In the early 1930s, cycles of nine
and 11 years dominated the thinking of naturalists, because of such natural phenomena as solar radiation
cycles (which were shown to have 11-year cycles) and tree-ring cycles (which were shown to have nine
year cycles), among others. Even after much effort Smith was unsuccessful in finding any such nine- or
11 year patterns in stock market indices. But when he tested 10-year groupings, a strong pattern seemed
to stand out. He published the results of his work in 1939.
In 1954, stock technician Edson Gould updated and presented Smith's data in tabular form, making some
canny positive predictions about how the stock market would behave in 1955 (it had an excellent gain).
Smith next revised and republished his work in 1959. There have been at least four more editions of this
work since then.