Reliable U.S. Equity Market Oscillations?

Do annual stock market swing returns swing around their average like a pendulum? In the November update of his 2022 paper entitled “Periodic Structure of Equity Market Annual Returns and Their Predictability”, Daniel Pinelis investigates whether annual returns of the S&P 500 Index and the NASDAQ Composite Index exhibit reliable periodicity. Specifically, he models an oscillator indicator that accumulates directional imbalances in annual stock index returns and applies the indicator, in combination with statistical, graphical and machine learning methods, to estimate extent and timing of further market declines from the current levels. Using annual returns for the S&P 500 Index since the mid-1960s and for the NASDAQ Composite Index since the early 1970s, both through late 2022, he finds that:

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