Cycles
All things in Nature occurs in cycles, including stocks and shares.
The Kondratieff cycle (60-70yrs).
An academic example which is almost a lifespan of a average human! If this holds true, the next Great Depression will be approximately in Year 2005.The U.S. 4-yrs cycles (due to U.S.Elections)
Early years - tends to restrain budget usually because of promise to cut tax, means less budget to work with. Hence slowing down of economy. When things get really bad, the Federal Reserve steps in (lowering interest rate). During the later years. The Congress will spend madly in order to win the favor of the voters, this cause over-heating and led to inflations. To rein in the excessive growth, the Federal Reserve will announce interest increase. These in turn will not be favorable to business expansion.
But there are much "shorter" cycles to consider.
The daily cycles
Frenized selling or buying in the morning (by un-informed & retail investor). Especially when many of the decisions are based on the perfomance of U.S. stock market and European stock market previous night. However, professional money & fund managers prefer opposite method by analysing the market movement first before taking up any positions in the afternoon.The Weekly cycles
Merger announcement usually on Monday (as Management layers prefer to settle such issue over the weekend) Clearing of outstanding positions on Friday. Short-seller on thursday will cover back on Friday, increasing the price. Rallies on Thursday and Friday Morning will often result in selling down in the Friday Evening.The Monthly cycles (may not be totally applicable to Singapore)
- 1st Day of the month. Pension fund managers (GIC?) will place / renew position. This may result in surge of price & volume.
- 3rd Friday of the Month. Usually Option expiration as Arbirgerur(?) swap cash between Hedge funds and Options Result in massive volue of closing out and renew.