cycles
Started by
airedale88
, Apr 13 2007 04:08 PM
17 replies to this topic
#1
Posted 13 April 2007 - 04:08 PM
SPX made it's nominal 5 wk cycle low in the expected time window. next upside target remains the nominal 10 wk cycle projection of 1471.10 +/-12pts. this just completed 5 wk cycle had high right translation, bullish, and an expected higher high in this 10 wk cycle would also show high right translation. failure to achieve the nominal 10 wk price target and especially if SPX fails to make a higher high than 1461.5 would create a left translated cycle and would suggest the decline into the late july 4.5 yr nest of cycle lows might be more pronounced than the sharp but short term nature of recent pullbacks. for now cyclic trend remains very bullish.
SPX and the 5 wk cycle bottom time window........
SPX and the 5 wk cycle bottom time window........
airedale
Outspeaks the Squire, "Give room, I pray,
And hie the terriers in;
The warriors of the fight are they,
And every fight they win".
Ring-Ouzel, England
Outspeaks the Squire, "Give room, I pray,
And hie the terriers in;
The warriors of the fight are they,
And every fight they win".
Ring-Ouzel, England
#2
Posted 13 April 2007 - 04:18 PM
Is there never an expected cycle top ?
#3
Posted 13 April 2007 - 04:39 PM
cycles are harmonic. each cycle low is a nest of cycle lows including all smaller cycles. thus, a 20 wk low would also be a 10 wk, 5 wk, 2.5 wk, and all smaller cycles down to intraday oscillations. this principle of harmonicity PROHIBITS nests of cycle tops, each of the cycles topping on it's own time frame. a 20 wk cycle would see it's time top occur as it's next lower harmonic cycle, the 10 wk, is bottoming. tops of cycles occur constantly. which of these tops becomes THE top for a particular movement in the market is based on the underlying cyclic trend. the more bullish the trend, the further to the right (high right translation) a price top occurs before the expected cycle bottom. the more bearish the cyclic trend, the further to the left a price top will occur. it is this harmonic principle and the cyclic action it creates that results in the usual rounding over we see at price tops and the difficulty most have in trying to "call" a top, while price bottoms created by the cycle nestings are much more easily recognized. Hurst discussed the higher risk associated with trying to short tops of any time frame and the best way to proceed by waiting to short the first rally after a "top" that fails to take out the previous high.
airedale
Outspeaks the Squire, "Give room, I pray,
And hie the terriers in;
The warriors of the fight are they,
And every fight they win".
Ring-Ouzel, England
Outspeaks the Squire, "Give room, I pray,
And hie the terriers in;
The warriors of the fight are they,
And every fight they win".
Ring-Ouzel, England
#4
Posted 13 April 2007 - 04:59 PM
btw, that's a very cursory explanation of the effect of cycles on price action. Hurst goes into much greater detail. i'll go on the record here that his explantion of price action is the only explanation i've seen in almost 30 yrs of studying T/A methods and theories which holds out over decades of stock market data. IMHO.
airedale
Outspeaks the Squire, "Give room, I pray,
And hie the terriers in;
The warriors of the fight are they,
And every fight they win".
Ring-Ouzel, England
Outspeaks the Squire, "Give room, I pray,
And hie the terriers in;
The warriors of the fight are they,
And every fight they win".
Ring-Ouzel, England
#5
Posted 13 April 2007 - 06:21 PM
I agree Airedale, he pioneered it probably, I don't know anybody prior to him who studied the harmonics analysis on the security prices. His methods are practical and quick, there are definitely faster ways to analyze with the help of the computers (more pattern based cyclical shapes etc), but the fundamentals he set out there remains. Thanks for all your help too...
#6
Posted 13 April 2007 - 07:41 PM
Thank you for the very interesting post. I have a lot to learn from all of you.
#7
Posted 13 April 2007 - 10:38 PM
airedale,
How do you explain spike tops and rounding bottoms tyipically seen in commodities, appying Hurst principles. Or are Hurst principles only applicable to stock market ? Just trying to understand.
#8
Posted 14 April 2007 - 12:22 AM
nav, we will see spike tops and rounding bottoms in individual equities as well as commodities. part of that is the sensitivity to fundamentals of the vehicle examined. stock indexes show the summed cyclic action of their underlying components, thus a smoothing of price action based on individual component fundamentals occurs. in some "commodities" such as foreign currencies, we often see the rounding tops and V lows in the dollar and the inverse in the currency traded against it. many commodities also are much more subject to specific fundamental events of a short term nature particular to them. crop reports, weather, etc.
fundamentals do play an important role in price action. as Hurst described what he called the "price motion model". 75% of price action was forseeable fundamental events, long term, smooth, and trend like in nature. 2% was unforeseeable fundamental events that add specific randomness to price motion.the rate of occurrence is small but the effect can be large and sudden. 23% of of all price motion is oscillatory, complex but semi predictable. (cyclic price action).
Edited by airedale88, 14 April 2007 - 12:25 AM.
airedale
Outspeaks the Squire, "Give room, I pray,
And hie the terriers in;
The warriors of the fight are they,
And every fight they win".
Ring-Ouzel, England
Outspeaks the Squire, "Give room, I pray,
And hie the terriers in;
The warriors of the fight are they,
And every fight they win".
Ring-Ouzel, England
#9
Posted 14 April 2007 - 12:46 AM
So........what your looking for is a dip of some kind "in the window" of a cycle. The recent 5 week was 20 week days days since 3/14. And the recent 2.5 week cycle was 13 days from 3/14.
My question is how big of a window for each cycle......bigger windows for bigger cycles?
As always, thanks in advance for willing to share your knowledge.
#10
Posted 14 April 2007 - 01:03 AM
goose, 21 days weekdays. there was a holiday. yes, bigger windows for bigger cycles. over the yrs, the 5 wk cycle averaged 24 to 28 weekdays. the 10 wk 48 to 56, 20 wk 96 to 112, etc. over the last few yrs there's been gradual shortening in the lengths of all these cycles. as you can see on the chart shown, the 5 wk cycle has ranged recently from 21 to 23 weekdays so i'd call it's range 21 to 24 wkdays for a more recent yrly average. Hurst suggested using the last 3 samples of any cycle to estimate the expected length of the next.
airedale
Outspeaks the Squire, "Give room, I pray,
And hie the terriers in;
The warriors of the fight are they,
And every fight they win".
Ring-Ouzel, England
Outspeaks the Squire, "Give room, I pray,
And hie the terriers in;
The warriors of the fight are they,
And every fight they win".
Ring-Ouzel, England