28 Weeks Later

The Fourth Rate Turning Update: 1/2/2025

The Memo:

From: Mr. Awsumb

Re: Timing, by magic or other means

Comments:

I firmly believe that if I can’t explain something simply, then I don’t understand it well enough. I wrote The Fourth Rate Turning, and put together the research, analysis and framework transparently, but I also want it to be clear to anyone at a glance what the EFF Cycle Indices are and measure.

Based on the past 3 cycles, the next 28 weeks are key points to watch for market softening. A reminder, Cycle 1 = 1999-2003, Cycle 2 = 2004-2011, Cycle 3 = 2015=2020 and Cycle 4 = 2022-Current day. Here are the 4 cycles as measured by Federal Funds Effective Rate, and the Dow Jones measured by EFF Cycle Indexing.

The 4th Rate Turning

Here’s where we get to the “Explain it simply part”. The EFF cycle Index is:

Any measurable item, in this case the Dow Jones, whereby it is indexed to the day/week/month the Federal Reserve started it’s rate raising cycle. Meaning, the day/week/month of raise, is equal to 100 (the indexed number/whole) .

Why? Ever heard that phrase; The definition of insanity is repeating the same action and expecting different results? Let’s just say that saying exists for decent reasoning.

Albeit, History never repeats itself (ENTIRELY), but the Kaleidoscopic combinations of the pictured present often seem to be constructed out of the broken fragments of antique legends. - Samuel Clemens aka Mark Twain. Emphasis mine.

So let’s break down the 4 cycles of the DJIA, plus look at what the next 28 weeks of past cycles can possibly offer us as a glimpse of that kaleidoscopic combination of antique legends when we combine them.

-Ulysses Awsumb

-end memo

---

The Research

The next set of charts will show us each individual cycle, from 1-4. With each being layered onto the next. Followed by inclusion of the Average. Plus the first S&P 500 Update.

Cycle 1