Market Cycles


DEFINITION of 'Market Cycles'

1. Trends or patterns that may exist in a given market environment, allowing some securities or asset classes to outperform others. The securities themselves may exhibit price patterns in their trading.

2. Trends within a particular sector or industry created by a particular innovation, product line, or regulatory environment. Revenue and net profits may exhibit similar growth patterns among many companies within a given industry.

BREAKING DOWN 'Market Cycles'

Market cycles are often hard to pinpoint until after the fact and rarely have a specific beginning or ending point. However, most market veterans believe they exist, and many investors pursue investment strategies that aim to profit from them by trading securities within the swings of the cycle.

Market cycles take both fundamental and technical indicators (charting) into account, using securities prices and other metrics as a gauge of cyclical behavior.

Some examples include the business cycle, semiconductor/operating system cycles within technology and the movement of interest-rate sensitive financial stocks.

  1. Business Cycle

    The fluctuations in economic activity that an economy experiences ...
  2. Corrective Waves

    A set of stock price movements that occur against the main trend ...
  3. Cyclical Industry

    A type of an industry that is sensitive to the business cycle, ...
  4. Elliott Wave Theory

    Theory named after Ralph Nelson Elliott, who concluded that the ...
  5. Expansion

    The phase of the business cycle when the economy moves from a ...
  6. Secular Market

    A market driven by forces that could be in place for many years, ...
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