After fifteen years of exhaustive research, backtesting, and many hours of deep thinking about the advanced technical trading methods employed by history's  master stock market speculators, and using much of the hodgepodge of  information we have managed to accumulate and cram into our Website, we have decided to publish a "clean" and "concise" summary of the key points that we routinely tout to our subscribers on a weekly basis.

This information is not the same-oh, same-oh, description of technical indicators and "head and shoulders patterns" that have been around for nearly thirty plus years now, and I can assure you that it's light years ahead of the few books that have addressed these advance methods with the same old, and typical, "in the box" thinking of prior authors.

We, at the Price-Time Review, and myself especially, are real world traders, and for us this is no academic exercise to be argued over at the end of the day...it is real world methods being used in everyday real world trading to improve a persons intermediate and long term results.  

While we use these methods to "swing trade" the long term periods, many weeks to a few months minimum, the "enlightening  information" this E-book provides will, undoubtedly, be of value to those with time horizons from Day Trader to Long Term Mutual Fund Investor.

As a matter of fact, in my opinion, it's the long term Mutual Fund Investor who stands to gain the most from this E-book, since it is they who are, "typically," the most uninformed about the existence of a Parallel Universe of Geometric Pattern Traders...who exert such a powerful, and unrelenting,  influence on nearly all world stock market indexes.  

If you have ever wondered why the news "many, many, times" does not fit the action of the market itself, then your eyes will be opened to find out that a huge percentage of all stock trading funds are being flipped, in and out of the market, based on these advanced trading methods.  

That is to say, advanced technical and pattern trading methods like Stock Cycles, Gann, Fibonacci, and Elliott Wave patterns don't much give a damn about what the news is "today," eventhough, even they are influenced by it over the long term.  Of course, the long term period for most news actually starts many days, weeks, or months before it is finally "released" to the general public.

In addition to the natural "mystery" that surrounds many of these methods, professional pattern traders can be assured that there will never be a shortage of talking heads around to cook up something, "after the fact," to explain why this "common" disconnect DID occurred.  

Of course, the true reason will be clear to those who know enough to spend as much time looking at chart patterns and counting trading days as they do reading the Wall Street Journal and scanning for "cheap" P.E. ratios.

While there are still a few Nay-Sayers who pop-up from time to time to espouse their bogus theory for a "totally free and un-manipulated market that runs on the principal of pure fundamentals and uncontrolled chaos," I can assure you that nothing could be further from the truth.  

Furthermore, anyone with a strong mind and a good pair of eyes, and who is willing to use both, will see that "Chaos Theory" refuted in very short order when they get into this E-book...to a reasonable certainty for those capable of rational thought and logical reasoning.

Regardless of your trading time horizon and risk level, from Hedge Fund Manager to Pension Fund Administrator, no one should be lacking in the powerful information this E-book identifies.  To do so, is like going into battle with one hand tied behind your back, and we all know what the "most likely" outcome from that mistake would be.

Into The Looking Glass: Risk is Real (1999)  
B. Bonfoey
Founder and Co-Editor of the:
1
Price-Time Review
"Where you find professionals working our trade, not bloggers
making conversation.  Just remember, if detailed trading information
 is free then that is probably what it's worth"!

Prologue: The best way to withstand an attack from the Boogie Man is not to stick your head in the sand or hide under the covers, as many PollyAnna's of the world would have you believe.  

When he shows up with a knife, and he will show up someday for sure,  you need to be waiting for him with a gun...if you know what I mean by that crude remark?  

In the sometimes cloudy world of stock market trading and investing, the most powerful gun to keep the Boogie Man at bay is called "being well informed," and at PTR our goal is to help you with that task...it is our business and this E-book is part of that process. 

SCROLL ON DOWN to view a "very informative" short description of the CONTENTS and subjects for this E-book.

(I) Cycles are for real... live with it or pay the price!    

FACT or fiction?  Well, I have serious doubts about the first four, but no doubts about the last two. 

In any discussion about waves and cycles, the first, and most important, question that people need answered in regards to any "stock market cycles," and their potential use in investing and trading, is: do they actually exist in the stock market or are they the result of a lot wishful thinking on the part of a few technical analyst?

This section answers that question once and for all, and shows the massive amount of evidence to support those who trade the near term or plan the long term based on a few powerful, well documented, and clearly reoccurring events relating to the stock market and some key economic highs and lows.

Unlike nearly all "cycle experts," who rely mostly on just opinion or someone else's historical observations, usually another self proclaimed expert, and expect their readers or clients to just plain accept what they have to say based on faith, we supply "the actual hard evidence" to support our overall thesis and our near term opinions.  

Based on a quote by Albert Einstein, who once said: "Don't tell me just what you think, tell me why you think it," we use "subjective" verbal descriptions in our weekly analysis but we also supply the deeper level graphical and empirical analysis that is the basis for "our assumptions" and "expectations."

What's that you say there Mr. "value only investor"...hogwash?

Ok, lets put an end to that DOUBT right here and now with some HARD EVIDENCE for the key TWO-YEAR (2Y) CYCLE...in U.S. based TECHNOLOGY.  

This Real World Cycle is based on the WELL KNOWN "existence" and periodic nature of MOORE'S LAW--in semi-conductor production and manufactuing equipment.  In addition, we note that in general most computing hardware and software stocks also have a "strong tendency" to follow along with the newest generation of DEFACT-O standards in semi-conductor micro-circuits...and, of course, the same 2 Year Cycle! 

<2Year "Technology" Cycle for TXN>

<2Year 'Technology" Cycle for the Semi-Con Index--SOX>
  
While most people may never need to dip that deep into the "dirty details" of our Visual Elliptical Fitting or the "wide angle" Spectrum Analysis methods that we use, like the statistical based Fast Fourier Transform, Sine Regression, or Linear Digital Filters, that data is there to see for those who do live by Professor Einstein's words of wisdom.   

By the way, as far as we know of, this use of some highly complex statistical mathematics to identify or confirm the major market cycles is not available from any other "so-called" forecasting service, and our detailed information in its support is also un-paralleled in the world of technical analysis...period!  
If you are not already aware of the "highly accurate and leading edge  information" in this section, then you are being "played" for a fool by those who do...SO DON"T BE!

<CYCLE EXAMPLE#1: TXN shows that 2Y Cycle is now Big Dog>

<CYCLE EXAMPLE#2:  Long Wave Cycles based on DOW 1900-2006>

BY the way, do you know what a "cycle offset" is?  IF, not, then I dear say that you know little about stock cycles and are in dire need of this E-book, and most likely our full web service.  

<CYCLE EXAMPLE#3:  SPX index showing 1-year and 13 wk cycles>
   
For now, click that SPX cycle link just above, again if you have already looked at it, and "look closely" at those orange dotted lines connecting the lows to the highs during the late 1990's, and those black dotted lines connecting the highs to lows during 2001-2002.  See a difference?  Right!

During a bull trend, which may or may not be a Bull Market, "most" of the cycle's TIME PERIOD is used up for the advance, and during a Bear leg down, as shown by the thick black lines, "most of" the cycle TIME is used up for the decline; eventhough, the cycle troughs, lows, nearly always "mark the chart" ON TIME...at least enough to be seen visually.   

THAT is why the time period between cycle HIGHS TO HIGHS many times will change; eventhough, the time period, or span, between cycle lows rarely do...by more than a few weeks to months for everything but the "Longwave Cycle." 

Also, be aware that the true market cycle troughs (lows) do not "miss, skip or disappear"...or at least have not done so in over a hundred years.

However, "THEIR INFLUENCE," on the actual net price of stocks or the index values for major market indexes, can be so "over powered" by OTHER INFLUENCES --like news, the economy, earnings, or outright manipulation-- that the actual price lows they "help" produce --"IN A BULL MARKET"-- can be "anything" from a weak, sideways, "consolidation," to a full blow crash.  

In a like manner, the highs produced by a cycle's INFLUENCE can be just as weak, or "lame," in a Bear Market.   Needless to say, and conversely, in a Bull Market the highs "usually" show up well on the index and individual stock charts, while in a Bear Market it is the lows that stand out like a flashing neon sign on the index charts themselves; eventhough, the underlying CYCLE itself is: "ALWAYS THERE and, nearly ,always ON TIME!"  

GET IT NOW?   HUM? 

This "shift" from "most of the time up" to "most of the time down" is called a cycles "offset," or "translation" in some old text by J.M. Hurst, and it's just one small part of the technical details that we use to determine trends and reversals.  

Needless to say, I'll bet you can now "actually see" one of the major SIGNS we look for to identify when the trend is Bull, Bear, Bear rally, or Bull correction?  RIGHT?  NO?  Think about what that "offset" means!

Even by reviewing that last SPX chart, and looking closely at the "offsets" produced by that index chart over the last three years, you can see why it's still impossible to say whether this big rally up, since the 10/2002 low, is a new bull leg up to the old Bull Market, from 1974 and/or 1982, or a Bear rally, "upward correction," within a larger, secular, Bear Market still headed down...that started at the 2000 highs...noting that even a "higher-high" made in an index or stock can still be a "Bear Rally," and a "Bull Trap."  

Like a lot of "things" in life, while basic knowledge of a process is a prerequisite for becoming a competent end user, like a successful trader or market investor, it generally takes a lot of hands on "experience" to put that knowledge into actual, "practical," use...with any high degree of accuracy.  

During this learning period, when someone is gaining that experience, is when it's a Smart Money move to have someone who has already traveled that road ahead of you help keep you on track...if you know what I'm getting at here?

IF you purchase our E-book and then subscribe to our <Weekly Forecasting Service> , you will get to SEE many, many, examples that not only confirm "OUR" SEVEN (7) Key Stock Market Cycles,  and our methods to locate and confirm them, but you will also "learn" --at a slow and steady pace-- the way to identify and track these cycles for yourself.

By the way, as a last note on Stock Market Cycles, in the Cycles section of our Website --see screen shot below-- we have some extensive information on J.M. Hurst and William C. Garrett , who were the pioneers of modern day stock cycle theory.  Eventhough, the vast majority of their work currently has little to no merit , and a lot of it has been totally discredited, they were, never the less, the ones who broke ground on the whole concept of locating market cycles with "statistical based data analysis"...now a process we call: "historical chart Spectrum Analysis!"

<SCREEN SHOT: Website-Subscribers   Cycles Introduction Menu>

<4-YEAR CYCLE HISTORY:  1896-2006 and 2010-2014 >
  

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(II) FIBONACCI ratios and math:  The most power force in trading next to being "GreenSpamed"...end of story!

The Fibonacci numbers are a long lost secrete of the Egyptian Pharaohs, and they are still being used in modern times to control nearly all of the world's financial markets...right?   WRONG!

All that hocus-pocus and mystical hype is nothing but pure BS pumped out by fools who can't count past ten with their shoes on, and who treat everything they don't understand --which is a whole heck of a lot-- as being some kind of bronze age magic, modern day extraterrestrial mystery, or some lame-o government conspiracy.  

The reality is that the Fibonacci numbers were nothing more than a mathematical shortcut, like a lookup table, to calculate "compound interest (and compounded capital gains in more recent times), until some modern day "true believers," of anything and everything --real or otherwise-- turned them into whatever they wanted them to be...for awhile anyway.

While it is not very well know, even in professional circles, the same two (2) men who developed the Elliott Wave Theory were also the ones who laid out the "thesis" of the Fibonacci ratios and retracements, for stocks and stock market indexes...back in the late 1930's to mid 1940's.  

These two theorist were R.N. Elliott and his friend, and ghost writer, a man named C.J. Collins.  While little "actual" Fibonacci Theory exist other than what appears in the Elliott Wave Theory books, by Mr. R.N. Elliott and Robert Prechter, in this E-book we explain:  1) what the FIBO'S are, 2) why they are important, and 3) "exactly" how to use them in everyday trading...or long term market timing and forecasting.  

Eventhough the Fibonacci section on our web site takes our subscribers very, very, close, to the "Holy Grail" of long term stock trading and investing, we do not there nor will we here reveal what the "Grail" actually is...at least in "simple and clear terms."  

Why?  Well, our underlying contention is along the same lines as those belonging to the world's greatest trader, W.D. Gann:  who went to great lengths to see that only those who did the preliminary work and should see it..."would see it"!

While I'm sure there will be plenty of Nay-Sayers who "scoff" at that remark and slander it as nothing but pure hype, I can assure you that those with the analytical skills and who are willing to do a little reading will, eventually, cross through the waste land protected by institutional smoke and mirrors and "clearly" see the Grail for what it is, and how it has been used for over a hundred years...and it still being used every day of every week of every year!       

By the way, did you know that this same "real world" GRAIL was used in ancient Egypt, Greece, and Israel, but not introduced into Europe until sometime between the first and last Crusades?   Just kidding here!  Or, am I?

NO!

<FREE EXAMPLE OF PTR's "Weekly Forecasting Service">

PLEASE SCROLL DOWN for Elliott Wave theory OR BACK UP TO E-BOOK MENU
(III) Elliott Wave Theory: is a complex pattern theory that is so "subjective" and ambiguous that it's nearly worthless at identifying a pattern until after it has already completed...true or false?

While that statement is as much true as it is false, the theory does have  some very important aspects that are not so ambiguous or subjective, and even those that are subjective are not without merit.

At it's basic core, Elliott Wave Theory has two principal tenets, or doctrines: The first, and in my opinion the most important, is that it provides a common language, or set of keywords and terms, that students, practitioners of the stock market's historical trends and gyrations, and that portion of the general public who have obtained a minimum level of  competencies with them, to communicate with each other when analyzing a chart for reoccurring events and patterns.    (V) Dow Theory:   Named after it's developer, Charles Dow, who was the first editor of the Wall Street Journal, in 1890, is an extremely simple but widely know theory that has has withstood the test of time... over the last century to be exact.

While it's main concept of higher-highs and higher-lows are being applied to trend periods as short as a few weeks, we only apply the trend test to what is commonly referred to as the "primary trend," which usually has changes only once every few years to a decade or more, and to what is referred to as the "secondary" trend, which "typically" has changes after many weeks  to many months.     

The other major tenant of Dow Theory seeks to determine when there is a "confirmed change" in the primary trend by comparing movements between  the Dow Jones Industrial (INDU) and Transportation (TRAN) averages.  A third index, the Dow Jones Utility index (UTIL) was added later by some modern Dow Theorist after they were removed from the Industrial Average, in 1927, but we do not use the Utilities index for our analysis.  However, one of the reasons these three indices appear on top of each other in the Wall Street Journal everyday is so that investors can apply Dow Theory, or so we have been told.

Our work in this theory is purely application based, since we do not make any major new revelations about it or clarifications to it in the way we do for the other four pattern analysis methods that we apply, and that we listed above.

BY THE WAY, for those who "think" that DOW THEORY has little to no value in modern day trading, I'll point out something that you  "probably" don't know.

IT was as part of this "theory" that the single most accurate TECHNICAL INDICATOR in the history of the financial markets was "defined," and that numero-uno indicator is STILL the single most accurate technical indicator for most markets today.  

IN addition, while I said we did not make any major revelations about DOW Theory in our work, that is only accurate for professional traders who already know the major concepts.  Needless to say, for those who don't know the underlying concepts then this one indicator could be worth a lot of wasted time and/or money.

---

(VI) PTR's Proprietary Roadmap:   While the full, and "annually updated," RoadMaps for 2004, 2005, 2006, or 2007 WILL NOT be included with this E-Book, free of charge, we will "bait your interest" with one or two LongWave charts and some "key" excerpts from each of them.  

Do you know who Harry Dent Jr. or Michael Alexander are, and if so then have you read their major works and predictions for the end of the Big Bull?
IF not, then our condensed versions and graphics should be a real "awakeing"...to say the least!
 
Needless to say, the 2007 RoadMap is, or will be in the near future, available to subscribers to the Price-Time Review's Weekly Forecasting Service ...but only for those who pay by the year or have three months of "continuous service"...via a month by month subscription. 

<FREE EXAMPLE OF PTR's "Weekly Forecasting Service">

(VII) Other Thing-ee's:   The main focus of the E-book is the four advanced pattern methods that we use; Cycles, Fibonacci, Elliott Wave, and Gann...along with a weak Dow Theory input, but we also want to touch "lightly" on other "key subjects" that we believe are important to investors and traders alike.

While we are trying to keep this E-book as small and concise as reasonable, we do cover the following subjects with a paragraph or two and provide links to our website that go deeper into them:

a) CANDLESTICK CHART ANALYSIS has actually become more and more of a "primary analytical method" for us, and in our next E-book addition we fully intend to present it as the Sixth Key Method used for our Forecasting Service.

While many traders already use, or "play around with," Japanese candlestick "patterns," we actually DISCOVERED the two "most common," or at least "most important," candlestick patterns now known to technical trading...or so we "think" that is the case.

FOR those unfamiliar with or only casually educated in "candle stick patterns," this next link will either refresh your memory or break new ground into a whole new method for: "visually identifying" supply verses demand of  any financial based chart with a basic data structure of: open-high-low-close.  Note that we, at PTR, use all the KEY TIME periods for that data in our analysis...as in daily, weekly, monthly, AND yearly.

<SIMPLE Example OF CANDLE STICK CHARTS and PATTERNS>

Now, eventhough I could give you hundreds to thousands of real world stock chart examples of these two "key patterns," I cannot do that here, or will not, for free. However, I will give you some limited criteria relating to their structure and use...as follows: 

1) They are "directly related to" Elliott Wave Theory, and only those "well educated" in that theory can "fully" use them in trading and forecasting; eventhough, anyone can "LEARN" to "visually locate" them within a candlestick chart by following our simple method.

2) While these two patterns are, in my opinion, "probably" the most common patterns to reoccur in any candlestick chart, they are VIRTUALLY UNKNOWN...SIMPLY BECAUSE they are BASE ON that Elliott Wave Theory--only-- and few traders can deal with its "seemingly" complex and subjective nature

b) Risk Management, as we define it, is not a boring statistical method only suitable for Bean Counters and Math Heads, it is simply keeping ones self educated on, and informed about, "all the forces" acting on the world's stock market.  That is to say, if you are going to be a "Player," as nearly everyone has become, whether that participation is in the form of a highly active Day-Trader or a semi dormant long term Mutual Fund Investor, then you need to stay just as fully informed about the technical conditions as you do to the fundamentals.

b) Business and Economic cycles, are not included in the cycles section per se', eventhough, we use the same advanced Visual Elliptical Fitting and Spectrum Analysis methods to detect and confirm them as we do the cycle patterns in stock charts.  The two graphic examples we show for this subject are "very enlightening" for most investors, to say the least.  

KEEP in mind that "THE ECONOMY" is one of the KEY FACTORS that determine stock and commodity prices, and ALL technical methods, including the advanced pattern methods, always work in conjunction with--or in opposition to--the underlying economic fundamentals...eventhough they DO NOT "usually" WORK in the exact same TIME FRAME.  

That is to say, that STOCK MARKET PRICES are the sum result of BOTH technical and fundamental FORCES, including the economy and its "cycles," BUT that STOCK MARKET "SHOULD" actually lead and "forecast" THE ECONOMY...by a few months to sometimes in years.  

c) Interest Rates, and especially the Infamous Yield Curve, are not anything new and we have no "revelations" to make about them, but we do want to cover two quick points relating to this subject since they have become very important to the world's stock markets.

Did you know that an "Inverted Yield Curve" is not only a rare event but is "almost always" a huge "bearish sign" for the economy, eventually or at least "temporarily," and therefore, the stock market. Yet, nearly all of the major Perma-Bulls during the 1999-2000 "technology mania" totally ignored this ominous event, in early February of 2000, in order to keep on hyping Yahoo and Amazon...even after the first major dump job had already occurred on "massive" volume.  

By the way, when I say "almost always" a huge bearish "sign" for the economy, that does not mean "ALWAYS," as some spin-masters are now hyping.  As a matter of fact, while we do "expect" the "Yield Curve" to go "fully inverted," sometime here in late 2005 or early 2006, we do not expect that to lead to a "out-right" nasty economy or recession in 2006...2010-2014 YES!  But in 2006? No!   

The reason that we do not "expect" this to become a big problem here in 2006, as I suspect many other market professionals are not expecting either, is because we have "this FED FUNDS chart " that tells us that the "probability" is "very, very, low" for a recession to occur, or a stock market top to occur IF? IF?  IF WHAT?   Sorry, but that answer is a biggie and we have to save something for the paying customers...if you know what I mean.

If you are someone who did listen to those "foolish" hypesters back at the 2000 highs, and especially if you are still doing so now, then get ready for another "a@# kicking" because we are working on the sequel right now.

Eventhough, "we think" the actual hammer will not come down until we make one more, and final "major top," out nearer to the downside trough (low) of the next "very well defined" 10-11 year recession-depression cycle low, which is next due between 2010 to 2011, nothing relating to the stock and commodities markets are chiseled in stone.

While our web site covers many more subjects, like our special trading models...the MSAR (which is up >750% since mid 1997 while the SPX is up only "about" 20%), and some of the proprietary technical indicators that we use, like the OmniTrader summary table, we have not included them in this  E-book; eventhough, your purchase of the E-book also gives you one month of free access to or entire web site and our weekly analysis.