Crafting the rhythms series III, 03/04/2012
By Fibo-Nacy
Review
Jan 24 2012, 01:09 PM
- A breakout from the critical resistance zone 1334-1342 suggests a new high around 1440-1450, A reversal takes place below the critical resistance zone may test the critical support zone 1127-1131.
- By taking out the critical support zone, the middle term low target 940-972 is becoming visible. By holding the critical support zone, a new high is possible
I compressed so many “If-Then-Else” into
this chart (02/16) , and also
in this chart (02/27) . I will delve into the possible modification when it is necessary.
Feb 3 2012, 09:14 AM
Index at the inflection point (to see 1376.55-1443.88)
synopsis:
On 02/29, Bull ‘occupied’ the wave set 3 at Fibonacci ratio 1.0/1376.55.
See, I told you by taking out the 1334-1342, Bull got '
reward' for 1376.55.
Now, tell me Fibo... How about 1443.88? By reviewing the recent index activity, the rejection at 1376.65, I sensed the bullish wave story does not seem to have been built to be a done deal; Bull needs to deal with the strong resistance 1381.5, 1387.41 and 1403.34. So, I think 1443.88 is still a hard nut to crack.
S&P500 index stalled in the inflection zone 1334-1342 for 9 trading days. On 02/16, a huge white candle surmounted the inflection zone decisively. So far this year, the S&P500 index made
the first attempt on 1377.76 then retreated. In May last year, the 0.786 retracement point 1381.50 from all time low/high has been challenged but the Bull did not make it. This time this important point is under siege again.
wave set 2 [1158.66|1267.06|1202.37]
1.382 : 1352.18
1.500 : 1364.97
1.618 : 1377.76 vs. 1788.04 on 02/29
1.707 : 1387.41
1.854 : 1403.34
wave set 3 [1074.77|1292.66|1158.66]
1.000 : 1376.55
1.308 : 1443.88
from all time low 666.79 to the all time high 1576.09
0.786 : 1381.50
Cycle entertainments
I made new attempts on cracking the cycle jungle.
Let’s start with an ideal case:
In the chart top section, there are 3 cycles, 80TDs (Trading Days), 100TDs, and 125TDs. The lumped sum cycle in the middle section, and the restored 100TDs (at the bottom of the chart). The restored 100TDs came out of a 97.5TDs-102.5TDs band-pass filter. The filter type is Butterworth. external second order, internal 4th order. In basic, the cycles outside side the band has been rejected. This chart demonstrated that an embedding cycle can be restored correctly by proper filtering process.
The following chart is a band pass magnitude and phase chart.
In the center of the band, the gain is normalized to 1.0. The gain drops quickly off the center band.
The phase on lower frequency (longer cycle) side has a leading phase shift, depends on the filter type and order, it is close to +180 degrees. Conversely, the phase on shorter frequency (shorter cycle) side has a lagging phase shift. it is close to -180 degrees.
The phasing problem causes a big puzzle in the cycle study. A particular cycle may drift so that it is hard to quantize. If our goal is try to sense the rough direction, we can take the advantage of the leading/lagging characteristic. Since +/- 180 degrees involves only a sign flip. i.e, sin(45 degrees)=0.707, sin(225 degrees)=sin(-135 degrees)= -0.707.
108TDs has been a dominant cycle from different reports. The cycle hunting can start with trail by error method. For example, check 100-110TDs, extends in longer cycle direction, 110-115TDs, searches in the shorter cycle direction 95-100TDs. This is the case I found 110-115TDs yielding the maximum gain. The gain is almost 20X bigger than the rest of the searched windows, so I am pretty sure, the 108TDs is now in the window 110-115TDs actively. when I narrowed the bands, 112.5-115TDs, 110-112.5TDS, I still cannot home-in the exact cycle. I believed the actual cycle was drifting from time to time. Here is chart I got. The magnitude is for reference only. you cannot get the gain calibrated correctly in this kind trail by error process. I kept the 20X gain chart for further study, I don’t want mislead my friends with premature information. In essence, The lumped sum short term cycle is about to turning up and the 110-115TDs is about to turning down (there is about 5 trading days phase shift). It looks like the net result would be counting on whether the 60-70TDs grows faster in size than the declining on 110-115TDs, 30-40TDs, and 40-50TDs.
The phase shift needs to be corrected, it came from the cycle drifting. The band-pass filter phase chart tells you how much it will be. At this moment I can do the correction manually. It is a very time consuming job, all the chart shown here has no such correction.
30-40TDS, the higher magnitude may be due to the cycle moves into the center of the band or it’ grows by itself’. No easy way to know what’s really happening.
40-50TDs
60-70TDs See Note
Note:
Andre Gratian is aiming on 22-wk (106TDs) cycle and 14-wk (67TDs) cycle.
Here is an excerpt: (
full text & charts )
- Market Turning Points, By Andre Gratian Sat, Mar 3, 2012.
“The most important one, because of its consistency in bringing about significant reversals, is the 22-wk cycle. Its last accomplishment was the early October low!
Another important one which might pin-point the top is the 14-wk (about) high-to-high cycle which regularly identifies market tops, the last one being the late October high.”
Closing:
I skipped the analytic tools such as the power spectra/Fourier analysis, Stanley told me he had done some studies a few years ago, not a fun work.
Thinking To Further Study? (Oh, No)
