2022-08-03

The “Decennial Pattern” suggests the stock market is ready for an end-of-year rally. Years ending in ‘2’ often form bottoms in the stock market, and this year may be no exception. Let’s see how this year plays out according to the Decennial Pattern, and whether it can hold a candle to previous years ending in ‘2’.


In our previous blog post, we looked at Larry Williams’ 2022 decennial pattern roadmap. [Source]

Now, Mr Williams has shared an updated presentation with StockCharts.com. Larry is seeing capitulation, important market buying, and bullish cycles coming into play. He believes the market a couple of months before a 3-year bull market cycle kicks off. [Source]

According to historical averages, the years ending in 2 are bullish. If you look at the past years ending in ‘2’, then average them together. The forecast is that blue line you see. This shows it is time to rally and probably strongly. Don’t believe me? Go back and look at those years.

I found this chart from Business Insider back in 2012 and updated it with 2012 result, and current 2022 chart. [Source]

A seasonality chart by EquityClock shows The Dow Jones Industrial Average confirming this pattern in years ending in ‘2’. You can see the clear pivot from around June-July. [Source]

Larry explains a bit about the Market Breadth, (the number of stocks that are declining vs advancing each day), and the critical number called the Advanced Decline Line (ADL), a concept that has been around since the 1900s and still works well. Now, the ADL is now showing to be stronger than price with market structure ‘W’ to add further fuel to the bullish case.

Inflation hit a new high and Larry believes prices will come down. That would be an encouraging bullish sign for stocks.