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Eric
The cycle lines just work as a mechanical tool to aid recording observed
cycles in the data. So you eyeball the data, input the frequency in bars and
then adjust the horizontal shift to optimize the phase. Overlay another
cycle line in the same inner window or the next one, etc.
I have uploaded a jpg called "Cycle illustration" just to show how the tool
can be used as part of a current cycle analysis for the S&P 500. That
analysis called the timing and extent of the move of the last 10 days. The
cycle lines used are 20 days (the dominant intermediate cycle) and two 110
day cycles with different phasing (if you eyeball the data there are
alternating lows every two and three months).
Note that for cycle analysis you need to shift the moving averages and
envelopes back by a half cycle.
When the market isn't moving cyclically (e.g. November breakout) this method
doesn't work.
If you want to get into cycles, pick up a copy of J M Hurst, the Magic of
Stock Transaction Timing. He sorted all this out in 1970, except he was
doing most of it by hand. Most chart patterns can be described as cycle
combinations.
Happy trading
Andrew
-----Original Message-----
From: equismetastock@xxxxxxxxxxxxxxx [mailto:equismetastock@xxxxxxxxxxxxxxx]
On Behalf Of chichungchoi
Sent: Tuesday, May 03, 2005 10:10 AM
To: equismetastock@xxxxxxxxxxxxxxx
Subject: [EquisMetaStock Group] How to apply the market cycle?
Does anyone know how to apply market cycle properly? Please see the
following image.
http://www.advantage.online.pl/FREE/cycles.gif
Does anyone know any related materials explaining about this issue? Thank
you Eric
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