The Bases of Stock-Market Forecasting
|3.||Intermediate or minor movements|
Long-time trends, sometimes called secular, are determined by and reflect the general condition of prosperity. They are chiefly governed by the broad trend of general commodity prices, the abundance of credit, and the activity of business.
Despite intervening cyclical swings such trends continue broadly upward or downward for periods of five or ten years, sometimes more. Thus the long-time trend of stock-price averages was upward from 1922 to September, 1929, a period of nearly eight years. Similarly, the long-time trend was up at least from 1884 to 1890-1892; down from 1892 to 1897; up again from 1897 to 1906; and down from 1906 to 1914. Such broad movements obviously correspond roughly to the major business cycles suggested on page 160.
Relatively little study as been given to this subject in connection with stock-market trends, and (unless it be by Moody's) little use appears to have been made of long-time movements for the purpose of forecasting. Probably this is due to the facts that their duration and degree of trend differ widely and that their turning-points seem so uncertain. The