T Theory has been an interesting concept in calm waters where steady tides slowly and predictably carried the water in and out, up and down between stocks and bonds.
I think the typhoon of the FED twist along with HFT computer driven trading, etc. has been totally disruptive to his theory and it's various permutations.
Below is an overview of the Hierarchy of Cycles and Ts compiled by one poster.
"Page" references are apparently pages of his T Theory "Encyclopedia."
It's complexity reminded me of why I like
Jack Chan's simple style of trading price.
Which would have you LONG the SPY since December
http://stockcharts.c...06617&r=442.png
This is to give the rational for the application of Ts and cycles. It follows classic logic of major to minor cycles and uses different indicators to estimate each period.
Hierarchy of Cycles
80 yr cycle So long no one lives to remember what happens Page 24
40 yr cycle A few recall this but not many Page 25
7 yr cycle/81 mo M or Mystery Cycle It can skip or be +/-by 18 mo determines lows Page 26
C Cycle Copper as Leading indicator Page 34
Ringing cycle 75days/15wk Predicts lows and sets up at the beginning of a Bull Run it is an oddity of
cycles Page 21
100 wks Bonds moving average for low in ringing cycle Page
76 wks S&P moving average for lows in ringing cycle Page
30 wks Gold moving average for lows in ringing cycle Page
Hierarchy of Ts
Advance Decline Ts These form the Mega Ts. Multi year and The center post are not under part of prior T
Volume Oscillator Ts These are intermediate Ts (can be several per year and can be short term Ts)
MFTs MFI can be used in Sectors usually 2-3 a year so short term
Price Ts These are short range and sector Ts using Money Flow or RSI at 14 days (2-3 per year) Page 29
Bear/Inverted Ts VO and MFTs that are at cycle ends or ringing cycle ends, Cannot be set by themselves they must be at other cycle ends and is a bit subjective = forecast a low coming from fundamental data or confidence index.
Types of T’s
Mega Ts Advance Decline multiyear Ts
Intermediate Ts Volume Oscillator Ts can be several months (2-3 yr) or short term (1 mo)
Short Ts Volume Oscillator or Price (RSI or MFI) One month or more using Daily Vol Osc. To draw.
Bull Ts Begins with Cash Build up to Center Post and then rally to end of T Project a top in the market
Bear Ts Project the bottom but can only be “set” if you know cycle is coming to and end as end date.
Null Echo Double Bottom Ts The end of a T when the center post is set at end of Double Bottom vs. center = Double Top.
Reverse/Inverse Ts Set in conjunction with end of a cycle – ringing cycle with MFTs. – Other cycles with VO and A/D
Red Ts These are after the fact Ts or forced into the VO trend. Used when trend not obvious
What to use to determine Time Ts = estimate of the end of a trend Cycles = estimate of low in price
C Cycle (copper) = its cycles leads market by 3 months.
MFIs = refine the Ts and estimate peaks also can be used for reverse T type estimates
Ringing Cycle = when lows will occur
Moving Averages = to establish the cycle times and support / resistance in rally and declines
Here are the indicators to draw Ts
Indicators for Ts
AD line $NYAD – New York Stock Exchange Advance Decline line Page
ARMS/TRIN: $TRIN overbought or oversold (Hi #s >3.0 or Low # <0.5) Use Mov Avg 1 – 5 -10 days Page 20
Vol Weighted TRIN Parker’s indicator advance decline stock divided by advance divided volume Page 64, 10
Daily Vol Osc Terry’s 0 mid scale and =/- 100 higher bottoms divergence price and VO Page 9, 18
McClellan Osc $NYMO – Col Q Vol Osc Daily, Col K A/D, Col K Vol, Col R Price (see page 22) Page 9
Confidence Indicator FAGIX/VUSTX Page 8
Trends: SPY, VUSTX, FAGIX (can substitute SPY, TLO, HYG Page
Keltner Bands Two Envelope channels defines the Top, Middle, and Bottom of Price (55 – 60 day with 3.7 – 4 ATR)
Envelope Channel 30 day with Standard Deviation of 2.5 = main trading range of price. Page
56 EMA Centerline of price action within envelope Page
MFI 14 day but also test to 7 day to align price Page 40, 38
RSI 14 day but also 7 day to align prices Page
Other Indicators
RASI Long term climax oscillator (multi year) <500 = climax. Page 10-11 & 93
Volume Oscillator The workhorse of “T”s Short and Intermediate Page 10, 64
Volume Weighted Oscillator This shows were the bottom is Page 67
$VIX Low <0.80 = end of trend Page 37
Momentum Oscillator $NYAD/$CPC = trend change Page 62
$TRIN with 5 day Moving Average <0.80 is end of trend sell signal Page
Zwieg Breath Indicator Signals Bull Market for 20% gain – these are very rare Page 71
Cobra’s Non Stop Oscillator $RSP/$CBCE (Cobra’s Mk oscillator) This is not T Theory Page 72
C Cycle Copper to S&P advanced 3 months to show forward Mkt trends Page 34
You got all that?
(Where are the cupholders?)
Edited by Rogerdodger, 18 February 2012 - 04:35 PM.
