A Comparative Study On Nonstandard Cycles In Chinese And American Stock Markets

This thesis defined a nonstandard cycle as a curve in which wave crests and troughs show up alternatively,and both its frequency and amplitude are not fixed.According to the definition,this thesis adopted an algorithm for the identification of bull and bear markets(the IBB algorithm)to define nonstandard cycles in Chinese and American stock markets,by analyzing weekly closing prices of the Shanghai securities composite index(SSCI)and the S&P 500 Index between December21,1990 and January 31,2020.A comparison of nonstandard-cycle results of two stock markets was made,followed by reasons for the differences between these two markets.The empirical results showed that,in the sample period,there are ten whole nonstandard cycles in the SSCI,and their average cycle length is 141.9 weeks,approximately 35 months.In these ten cycles,macro economy,policies in the stock market,and price fluctuations of international stock markets all have impacts on the SSCI.As for the American stock market,four nonstandard cycles were defined in prices of the S&P 500 Index,three of which are intact,and their average cycle length reaches 328 weeks,about 82 months.Uptrend anddowntrend in four American nonstandard cycles are highly connected with economic policies its incumbent president adopted.Then,the Chinese stock market was compared with the American stock market in terms of time spans of their bull markets and bear markets,average weekly growth rates of the indexes,and proportions of positive rates of return.It turns out that,in bull markets of the American stock market,prices increase slowly and its time spans are usually long,and prices change sharply in the Chinese stock market,no matter in bull markets or in bear markets.In both bull markets and bear markets,there is nearly no difference in proportions of positive rates of return between these two countries' stock markets.However,proportions of positive rates of return of the SSCI are more fluctuate than those of the S&P 500 Index,which means that rates of return of the Chinese stock market are faced with more uncertainty.Finally,from the perspective of essential investing ideas,listing systems and delisting regulations,laws and regulations,and governmental interferes,this thesis analyzed reasons for the above-mentioned differences between the Chinese and the American stock markets.Some personal suggestions were accordingly provided,including enhancements of investors' education and perfection of lawsand systems,and then,the weaknesses of the thesis were given.