The magic number 30
Perhaps no single number more fully embodies the essence of the rhythmic fluctuations which characterize human affairs than that of the number 30. Its significance to the realms of finance, economics, physics, mathematics, astronomy, and religion is integral to a full comprehension of each field, and almost mystical in its import. In order to elevate our understanding of cyclical occurrences in human affairs (particularly in the realm of finance) we will take up a careful examination of this most important number as it relates to the markets.
While the number 30 has many significations, its most fundamental significance is the fact that it is the number of the circle, or cycle. The circle, it will be noted, is the geometric expression of absolute completion and infinity. It symbolizes the continuous, yet fixed, nature of life, energy and matter along the timeline. It is the shape of every planet in the solar system and the fittest representation of all time cycles as the clock itself (being in the shape of a circle) testifies.
The clock also provides a fitting analogy to our examination of the number 30. Besides being the ultimate embodiment of the cycle (which governs the affairs of every life-form on earth), the clock is divided into 12 sections, or hours, upon a circular face. The circle itself is 360 degrees (a completed cycle in geometry), and 360 divided by 12 yields 30. Therefore, 30 has a special significance in the cycle of time.
Thirty is also half of 60, the number of seconds in a minute and the number of minutes in an hour. It forms an integral part of the measure of time itself. Thirty is the number of days in a month, and three times 30 is equal to one quarter of the calendar year. In the realm of finance, the quarter has a very important meaning in the analysis of corporate earnings. As such, it forms the backbone to financial cycle analysis since identifiable cycles of stock price fluctuations tend to occur in quarterly increments.
Thirty days times 3 is also the division of the calendar itself into four (the number 4 representing temporal completion) equal sections. It also forms the basis of the four seasons of the year and therefore is important to the agrarian economy (without which life could not exist). The farmer must plan his tilling, planting, fertilizing, and harvesting activities along these four quarters (30 x 3), with each quarter representing a timeframe integral to the success of his crop. Therefore, the number 30 also forms the backbone to understanding the commodities market as well, and is a central component in the analysis of supply and demand.
Since the cycle (of which the number 30 is an essential feature) cannot be expressed as a complete circle along the timeline, it takes instead the form of an S-shaped curve, or sine wave. This is nothing more than a bisected circle, or cycloid, with both halves connecting to form the completed circle in price and time (though not in actual form). Using this as a foundation for the understanding and interpretation of the cycle, we will proceed along this channel.
The number 30 can also be expressed as 10 x 3 (10 being the number of ordinal perfection and 3 the number of divine completeness). This mathematical structure further underlines the special importance of this number. Thirty is also the number of probation and preparation. A man, before he is fit for success, very often must toil at his trade until he reaches the age of 30 before he is ready to advance and apply all his wisdom and experience with great success. Thirty also has a theological significance since we read in Scripture that Christ was 30 when he began his public ministry on earth. In biblical numerology, the number 30 is also representative of blood (the essence of all life) and the price of blood. For example, Christ was sold by Judas Iscariot for 30 pieces of silver.
In economics and socio-political affairs the number 30 also takes on a special importance. Major periods of economic growth and technological progress tend to occur in 30 year cycles. A definite 30-year cycle can be recognized in U.S. economic history going back as far as 1864, the end of a major economic depression in the U.S. (a period which culminated in the War Between the States). The next 30-year cycle bottom occurred in 1894, which marked a period of rapid innovation and the transition between an agrarian economy and an industrial one. The next 30-year cycle bottom occurred in 1924, which led to the explosive economic growth of the "Roaring '20s" and culminating in the Great Crash of 1929. The subsequent bottoms in the 30-year cycle came in 1954 and 1984, with the next 30-year cycle bottom due in 2014.
The 30-year cycle also manifests itself in the commodities market, including the market for gold. For instance, from the time when private gold ownership was once again legalized in the early 1970s until today—the trough of gold's long-term cyclical bear market—has been almost exactly 30 years. Based on this fact, a new bull market in gold should be in the process of beginning. Thirty years before the last 30-year cycle bottom (after Roosevelt had made gold ownership illegal) commodities saw yet another major trough following a period of deflation. Of course, the 30-year cycle is also approximately half of a complete Kondratieff Cycle, or "K-Wave," the long-term cycle which governs commodity prices.
There are many ways in which the number 30 influences the realms of finance and economics. We have only scratched the surface in this essay, and an exhaustive survey of how the "magic" number 30 manifests itself across the gamut of human affairs would be nearly impossible. Nevertheless, this highlight of the numerological significance of 30 should broaden our understanding of the all-important cycles which govern the financial markets.
February 26, 2001
Clif Droke is the author of the recently published books Technical Analysis Simplified and Moving Averages Simplified (Traders Library) and is the editor of the weekly Internet Stock Forecast newsletter. For a free two-week trial to the newsletter, visit the Web site at www.istockforecast.com