Sunday, February 12, 2012

Cisco’s Secular Bear

Cisco’s Secular Bear began in early 2000 and is now into year 12 which is displayed in the very long term chart. Note also the shorter Kitchin Cycle which is a short business cycle of about 40 months discovered in the 1920s by Joseph Kitchin.

These are noted as the cycles (1), (2) and (3) in the lower plot

The pending 4th cycle should drive CSCO up and out of the secular bear – in effect introducing a new secular bull or an “Echo” Global Tech Boom. The first technology boom and bust was mostly confined to the English speaking countries. A pending “Echo” technology boom should be a global event with the survivors of the first technology boom and bust being the beneficiaries. Now what is good for Cisco is good for the broader technology sector, and so we need to monitor CSCO to see if the pending break above $20 will be the beginning of another secular bull that could drive the stock up and out of that 12-year period of price congestion.


delbert said...

Bill: Do you give any consideration to the cup & handle chart pattern? I think I see a few starting to form on the 5 year chart with this latest move up.

Shawn Severin said...

Hi Bill. I clearly recognize the fact that we are in the early stages of the US driven technology boom and that we are in the late stages of a commodity boom. Where do you see the Canadian dollar trading compared to the US dollar in the long-term? Will it remain elevated or will return to a scenario similar to the 1980s when our dollar fell compared to the US dollar over a long term period.