ABSTRACT
There are periodic fluctuations in economic activity. Economies move through cycles of expansion and recession. Fluctuations in the level of economic activity are accompanied by fluctuations in corporate profits, interest rates, inflation rates, and other economic variables. Stock market prices also appear to have cycles, and those cycles are thought to be related to the cycles of the economy. If there is some regularity to the business cycle (economic cycle), and if stock market cycles are related to the business cycle, forecasting business cycles could be used as a means of forecasting stock market movements.
