Author(s): Olga Benenson, Serge Velesco, Oleksii Dzhusov
The article is devoted to the topical issue of research of cyclical patterns in economy and their practical use for forecasting the direction of financial markets. The aim of the work is to find out the peculiarities of seasonal-cyclical patterns "January barometer", "First five days of January" and "Presidential election cycle" in the USA stock market in modern conditions and to develop recommendations for practical use of these patterns in investment activities. The US stock market, as a part of the global financial market, was chosen as the basis for research. The research was conducted by statistical processing of data on the values of the broad market index Standard & Poor's - 500 (for the period from 1950 to the end of 2020) and the Dow Jones Industrial Average (for the period from 1897 to the end of 2020). Peculiarities of manifestation of seasonal cyclical patterns "January Barometer" and "The First Five Days of January" at the US stock market in modern conditions were determined. An algorithm for using these regularities has been worked out and suggested for making forecasts of the prevailing market movement direction for the coming year. The authors have also studied the peculiarities of "Presidential election cycle" manifestation in the modern economy. We have suggested rational ways of using this cycle to predict the dominant trend on the stock market in the every coming year. The practical application of the results of the study will improve the accuracy of the forecasting of the prevailing trends in the international stock markets.