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Hi again,
To Lindsey: I am sorry to hear that about Clyde (I sure did not know it until now) - but happy to see that he seems to be doing better. I don't know him personally, but I know that he and I share the same long-time interest in cyclic analysis, at least from what I have seen over the years. I do know that both of us have the original Hurst book from 1970 (not the reprints). if I were guessing, Clyde has his all marked up with notes and annotations - and - when at his computer - he likely has it setting somewhere in close proximity (as do I!). Wishing him to get well soon and to get back in action.
To Ira and Jim:
thanks for the message - yes and I agree with the variability notes. it is easier for me to project price than time. Someone messaged me on this very thing just a day or two back, and my response was that the market was only semi-predictable at best (but certainly more than random). Yes, if you are following Hurst's rule of harmonicity between cycles, you will nearly always have one peaking - while the next smaller cycle is bottoming; this has always been a tough one to get around for the analyst that tracks them, which is where technicals can come in handy.
The one thing that I have found to be most unpredictable is the variance from low to low with any given cycle. Over the years I have found that the normal assumption is that 80% of the rotations will bottom within a variance of 20% of the phase. In other words, a 20-day cycle will have a range of 16-24 days from trough-to-trough, in which 80% of these will low-out. The other 20% will see some contraction or extension outside this range, which cannot be predicted or forecast - that part I see as random.
with the above, it helps to throw in technical factors such as breadth and volume, as normally one (or both) will see some type of divergence as any particular cycle is topping or bottoming. for example, about 80% of the 20-day lows in the last decade have usually seen the McClellan oscillator diverging from price. thus, if you are looking to buy a 20-day bottom, then statistics would tell you that the best deal is to wait for a divergence in breadth - even though it won't always occur. for example, today's new low in price for the SPX is seeing a divergence with the McClellan oscillator (with the 20-day cycle extended at 27 days along from it's last bottom).
once any cycle does bottom or top, then you can throw in a past (statistical) history of the same to get some idea of how far in time and price it is likely to move. I also like to look at how the pattern plays out with any cycle; that is, does it make a higher high? does it hold above it's prior bottom? if it does, then how far does it tend to move up (or down?) on the following rally (or decline) phase? this offers an added degree of visibility.
using current market as an example: the 9-month cycle last bottomed in early-November at the 1029 figure on the SPX, which was above the prior low for the same (the March bottom of 666.79); thus, it formed the pattern of a 'higher-low'. in the past, when this 9-month cycle forms this pattern, then the average rally (with time) has lasted 133 trading days or more before the next upward phase was complete. with that, the current inference from time is that the SPX could attempt to hold off it's top with this cycle until on or after May 7th of this year. with price, with average rally within this pattern has been 24% from trough to peak, which makes at least the suggestion that the SPX could move as high as the 1270's before this 180-day cycle tops out later this year.
Having said all the above, I do think that different personalities will lean towards different approaches; what works for one won't necessarily work for another. there are various forms of analysis that don't make a lot of sense to me at all (for me, astrology) - though there are those who are able to use it with success. I guess each to his own! :-)
My apologies for the delayed reply. I get the group message in digest form in the morning, and have been very busy this year and thus only now was able to read it and to reply.
Jim
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