As the market advanced up out of the June/July 2006 low, many began proclaiming those lows as having marked the 4-year cycle low. With the last obvious 4-year cycle low having occurred on October 10, 2002 at 7,197.49 and when the October 2006 low that most were expecting did not occur, most pointed at the June/July lows as having marked the 4-year cycle low. I can understand why on the surface most people would have thought this. But, that was the easy answer for the market not making the low in October that so many were expecting. I can promise you that cycle analysis is much more involved than simply counting from one point to the next. By nature, cycles contract and expand. But, this expansion and contraction does not invalidate the cycle, as it is the overall ebb and flow, or rhythm, that makes the cycle. However, it is because of the fact that market cycles are not precise mechanical events that we must also incorporate other tools such as statistical analysis and the use of technical indicators.

Everything in nature is a cycle of sorts and if you think about it, there are variations in most all cycles and the stock market is no different. Our heartbeat is a cycle as is our breathing. This doen't mean that they are so mechanical in nature that they are exact. Our heart may beat 70 beats one minute at one time of the day and 85 during another part of the day. The seasons of the year are also cycles, but here too, we can have a late, an early or even a mild season. However, these variations do not invalidate the cycle. A late spring does not mean that spring will not come. The same goes for the migration of birds. Just because it may be late in the year and the geese haven't begun migrating doesn't mean they won't. True, there are other cycles in nature that are very mechanical or rigid such as the phasing of the moon and the tidal changes in the sea. The stock market does not have mechanical cycles and is more like the changing of the seasons in which there is a degree of fluctuation within the cycles. I could go on and on, but I think you get the point.

Now, let's get back to the stock market. As the market began to advance out of the June/July lows last year I publicly said that the summer rally had begun and that the market was going to move higher. At the same time, I also said that my statistical analysis surrounding the 4-year cycle said that we were still pushing into that top. In fact, I first published that I was looking for the 4-year cycle low in 2007 rather than 2006 in my February 2006 newsletter. This expectation was all based on trend quantification work and statistical analysis. I have not wavered from that analysis since because nothing has occurred to invalidate the statistics.

Anyway, as the Industrials approached the May 2006 high in September I did begin to question the rally. However, I repeatedly told my subscribers that in spite of my skepticism, as long as the intermediate-term Cycle Turn Indicator remained positive, higher prices were nonetheless still possible. So, yes I have been bearish since about September in regard to the 4-year cycle because the data told me that the market was pressing into a major top. But, at the same time I also acknowledged the fact that the intermediate-term Cycle Turn Indicator was positive and that higher prices were possible as the market continued to press up into the 4-year cycle top. As it turned out, the Cycle Turn Indicator remained positive all the way into December, at which time it too began warning of an ominous top in the making and has since triggered an intermediate-term sell signal. As I now see it, the decline we saw last week was most likely the initial leg down into the 4-year cycle low, which still lies ahead. Further confirmation of this by my statistical "DNA markers" surrounding the 4-year cycle top are still developing. Yet, in spite of the existing market risk and the 533 point loss we saw for the week ending March 2nd, complacency is still high. Very few understand the market risk here and it still seems that most people who are aware of the 4-year cycle still believe that the low came in connection with the June/July 2006 low.

Also, in the wake of one of the worst single week declines in market history, I hear no one in the mainstream media, or even other market analysts talking about the possibility that the 4-year cycle low could still lie ahead. I was recently asked why this is.

The answer is simple. Mainstream is out to skew the story in the most bullish light they can and to heck with the truth. Do you really think that Cramer is going to come on the air and tell the public to sell because the market is at risk of a major decline into a cycle low? The mainstream media has not ever warned anyone of a decline that I'm aware of. I've studied the writings around the 1929 top and mainstream said then that all was fine.

Following are a few examples and please compare these quotes to the price action in the first chart below.

September 1929
"There is no cause to worry. The high tide of prosperity will continue." -- Andrew W. Mellon, Secretary of the Treasury.

October 14, 1929
"Secretary Lamont and officials of the Commerce Department today denied rumors that a severe depression in business and industrial activity was impending, which had been based on a mistaken interpretation of a review of industrial and credit conditions issued earlier in the day by the Federal Reserve Board." -- New York Times

December 5, 1929
"The Government's business is in sound condition." -- Andrew W. Mellon, Secretary of the Treasury

December 28, 1929
"Maintenance of a general high level of business in the United States during December was reviewed today by Robert P. Lamont, Secretary of Commerce, as an indication that American industry had reached a point where a break in New York stock prices does not necessarily mean a national depression." -- Associated Press dispatch.

January 13, 1930
"Reports to the Department of Commerce indicate that business is in a satisfactory condition, Secretary Lamont said today." - News item.

January 21, 1930
"Definite signs that business and industry have turned the corner from the temporary period of emergency that followed deflation of the speculative market were seen today by President Hoover. The President said the reports to the Cabinet showed the tide of employment had changed in the right direction." - News dispatch from Washington.

January 24, 1930
"Trade recovery now complete President told. Business survey conference reports industry has progressed by own power. No Stimulants Needed! Progress in all lines by the early spring forecast." - New York Herald Tribune.

March 8, 1930
"President Hoover predicted today that the worst effect of the crash upon unemployment will have been passed during the next sixty days." - Washington Dispatch.

May 1, 1930
"While the crash only took place six months ago, I am convinced we have now passed the worst and with continued unity of effort we shall rapidly recover. There is one certainty of the future of a people of the resources, intelligence and character of the people of the United States - that is, prosperity." - President Hoover

June 29, 1930
"The worst is over without a doubt." - James J. Davis, Secretary of Labor.

August 29, 1930
"American labor may now look to the future with confidence." - James J. Davis, Secretary of Labor.

September 12, 1930
"We have hit bottom and are on the upswing." - James J. Davis, Secretary of Labor.

October 16, 1930
"Looking to the future I see in the further acceleration of science continuous jobs for our workers. Science will cure unemployment." - Charles M. Schwab.

October 20, 1930
"President Hoover today designated Robert W. Lamont, Secretary of Commerce, as chairman of the President's special committee on unemployment." - Washington dispatch.

October 21, 1930
"President Hoover has summoned Colonel Arthur Woods to help place 2,500,000 persons back to work this winter." - Washington Dispatch

November 1930
"I see no reason why 1931 should not be an extremely good year." - Alfred P. Sloan, Jr., General Motors Co.

January 20, 1931
"The country is not in good condition." - Calvin Coolidge.

June 9, 1931
"The depression has ended." - Dr. Julius Klein, Assistant Secretary of Commerce.

August 12, 1931
"Henry Ford has shut down his Detroit automobile factories almost completely. At least 75,000 men have been thrown out of work." - The Nation.

The same sort of headlines applied as the market began to decline out of the 1966 and the 1987 tops. More recently, do you remember anyone on TV warning you about the 2000 top and the decline that followed as price began to drop into the 2002 4-year cycle low that followed? No, we were all told that everything was fine and not to worry.

Well, my statistical analysis surrounding the 4-year cycle top in 2000 not only allowed me to make the call, but I missed the price target by a mere 200 points. That article was written in July 2001 with the Industrials well over 10,000 and this was later published in the November 2001 issue of Technical Analysis of Stocks and Commodities Magazine. It is these same technical and statistical methods that have and continue telling me that the odds are the 4-year cycle low is still ahead of us and that in all likelihood the 533 point decline seen for the week ending March 2nd was likely only the beginning.

For your convenience I have again included charts showing the ebb and flow of the 4-year cycle since the inception on the Industrials in 1896.

I can tell you that in spite of what the mainstream and most other analysts are saying about the market, my statistical analysis surrounding the current 4-year cycle appears to be on track in that the statistics still favor the 4-year cycle low being ahead. If you would like to hear the side of the story that you will not get from the mainstream media, then perhaps Cycles News & Views is your source. I cover all of the statistical probabilities including price and time expectations for the current 4-year cycle. I also cover the Dow theory and give long, intermediate and short-term expectations for the market. Additionally, I cover the dollar, gold and bonds. I also report on other key markets such as oil, gasoline and copper at important turn points, using my Cycle Turn Indicator, and I do updates three times a week. You have been warned! Get the technical and statistical facts and know exactly what's expected and when significant turn points come based on the ever so important Cycle Turn Indicator. www.cyclesman.com