Mini-Introduction
P3b
and Non-Subscriber
Educational Information FOR:
Please Select a major
topic from P1 to P5 below--OR--scroll down to
select keywords for topic P3b* (Stock Cycles)
P1
(Fibonacci)
P1b
(Fibonacci-2)
P2
(Gann-1 &
LongWave rate and trend analysis)
P2b
(Gann-2 & LongWaves-2)
P3
(Elliott Wave: bar, candle,PF, & swing charts)
P3b
(
Stock Cycles )
P4
(Business-Economic
Cycles)
P5
(Dow Theory-Pivot Point
Theory)
|
P3b --Please
click a KEYWORD
below OR scroll down--
P3b Keywords:
Cycles
,
Stock Cycles
,
Historical Stock Cycles
, Stock Market
Cycles
,
Cycle Analysis for stocks
,
Cyclical Analysis
,
Presidential (4y) Cycle
,
Seasonality and Intermediate Term Trading Cycles
,
Key Trading Cycle
,
Cycle Engine
,
Bond Market and Rate Cycles
,
Gann Anniversary Dates
,
Spectrum Analysis
,
Stock Market Forecasting
,
J.M.Hurst
,
William C. Garrett
,
Fast Fourier Transform
,
Digital Filters
,
Spectrum Analysis for stock markets
,
cycle offsets
,
Sine Regression
,
Faulty Polynomial Regression
for stocks
,
KEY Exponential Regression
for stocks
,
Faulty Cubic Regression
for stocks
,
Faulty Linear Regression
for stocks
,
Dow Theory
,
MORE STOCK CYCLES
via EBOOK Introduction
,
Business Cycles via INTRO-P4
|
1
-Please scroll down for PTR's Mini-Introduction-
1
Ghost-Goblins-Zombies
...Witches-Waves-Cycles!
Fact or Fiction?
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"Since the beginning
of time, rhythmic regularity has been the law of creation.
Gradually man has acquired knowledge
and power from studying the various
manifestations of this law. The effects of the
law are discernible in the behavior of the tides,
the heavenly bodies, cyclones, day and night,
even life and death. This rhythmic regularity is called
a cycle."
From the 1939
Financial World article by R.N. Elliott (1954)
"WHERE THE MAGIC IS
'Stock Prices Fluctuate'
This statement may describe the only
stock price characteristic on which any two students
of the market will unequivocally agree!
It's a mighty important truism, however, for
on it rests a solid fact: More money can be made faster
from these price fluctuations than in nearly any
other way known to man, provided you own a crystal ball which
tells you when the
fluctuations will occur.
There is another truism which even tells one how
to turn on the Golden Stream of: 'Buy low and sell high.'-Or
does it? How low is 'low'" and how high is high? Phrased
differently: when is 'low' and when is 'high'? It can be seen
from the preponderance of which in these all-important
questions that the faucet handle is labeled 'Timing.' "
The Profit Magic
of Stock Transaction Timing
(1970) J.M. Hurst
JUST REMEMBER,
as a BASIC AXIOM of STOCK CYCLES: "A Key U.S. Cycle will never miss-skip-or
terminate UNLESS the underlying basis for its existence is either terminated
OR materially alterated"...so as to dramatically reduce it's INFLUENCE
on investments in this country.
4-Year, "Presidential," Cycle Overview and History
(5/2007)
The Price-Time Review
B.Bonfoey Co-Editor
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--Please scroll
down to continue--
Ghost-Goblins-Zombies...Witches-Waves-Cycles!
Fact or Fiction?
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 " ," 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 few
technical analyst?
While you can never expect
to see the words of God scribed into stone for
anything relating to the financial markets, it's
my educated opinion that the answer to that question
is so clearly a resounding "yes they do exist,"
that any other answer can only be the result of being
uninformed.
The next few graphics,
at the link below, shows some typical examples of PTR's
visual Elliptical Fitting Method (tm)
and parts of our "wide angle" Spectrum Analysis (tm)...which
we use to locate any periodic cycles in chart data,
if they exist. This Elliptical Fitting
Method is used only in conjunction with our statistical
"Spectrum Analysis," using the Fast Fourier Transform,
Digital Filters, and Sine Regression analysis,
to confirm or reject any cycle that is "somewhat
defined," to "very well defined," by the historical data.
Since our service targets both the
U.S. stock and bond markets, these next two links will give you
a good "overall" idea of how we arrive at our cycles and just how
valuable they can be to anyone trading in either stocks or bonds, since
we all know they are "roughly" connected at hip...so to speak. In
addition, since the U.S.A. is currently the BIG DOG in World markets,
then even those investing or trading in other markets can benefit from
our work.
<U.S. BOND MARKET: 5 Year rate cycle
revisited 9/20/06 >
<U.S. MARKETS: KEY 5 Year "rate" cycle...Spectrum
Analysis >
WHAT is that I hear? I'm full of "it" you
say? Ok, read every word and look over the DOW chart
on the page at this next link, below, and then come back and
we'll see what you say? HUM! Now, who "was" full
of "it"?
<PTR's visual fitting
example #1: Dow Jones Industrials 1896-2006>
<PTR's Sine Regression
example: US Electric Generation 1972-2005>
Now, stating that "periodic
cycles do clearly exist in world stock markets"
is a bold statement, but here me
out. In my opinion, the key to this statement
is, of course, how one defines the term "cycle."
Since Webster's Dictionary
defines a cycle as "a period of time within
which a round of regularly recurring
events or phenomena is completed," then my statement
is clearly true since the stock market has
several identifiable events that reoccur on a regular
basis.
For example, earnings
reporting season occurs every quarter,
or thirteen (13) weeks, and I doubt that
anyone would deny that this reoccurring "event"
has a serious influence on individual stock prices and
overall stock market indices. OF course, the "effect," or "influence"
from this cycle event, upon the whole of a stock market index or even
a single individual stock is, is not always "regular" or periodic when
viewed on price-time chart because: 1) it's only one of many "key
influences" AND 2) it's level of influence, or "force," can be anything
from a weak positive or negative to a strong positive or negative...depending
on the amount of those "reported earnings" and the "guidance" given
by the company for the periods ahead.
As a matter of fact, this "earnings
cycle" is "most likely" the pulse engine for all
short term and intermediate term cycles in the stock
market, like the "well defined" 10-14 week Trading Cycle
(13 weeks or 89 calendar day "mean").
Then there is tax time (@ 26w or 6m and
@ 1y), congressional election time (2y), the
Christmas," retail," buying season (1y),
presidential election time (4y), options expiration
dates (3.5 to 4.5 weeks...21 cDays), the "near term" technology
upgrade cycle (21-25m and 48-55m), and the virtually
guaranteed October high or low "seasonal cycle", which
is actually the "cluster" of peaks or troughs from other
cycles and the "seasonality cycle"...which "typically" peaks
in May-July ("sell in May and go away"!), and makes a trough, low,
in Sept. or Oct.).
While the "Longwave" cycles are discussed elsewhere,
they are essentially centered around the periodicity
of the "key" 4-Year Cycle-- which is also equal to sixteen
13 week cycles--and the "weak" 8-Year Cycle in transportation...until
they reach the LongWave Cycle(tm), of 34-40 years (trough
to trough and, also, "roughly," peak to peak).
By
the way, eventhough the 13
week cycle ("about" 89 calendar days or 65 trading days),
is not absolutely periodic, regular, since it does have
an occasional "inversion," when the market is making the transition
between a bonsai bull trend and a bear trend, or at least
between a strong bull trend and something considerably less bullish
(like a consolidation or correction), it is "average periodicity"
is still regular enough to be considered "periodic."
Once again, I want to point out
that the cycle's time period was most likely exact and unchanged,
since it's basic underlying source was the real world reality
of "earnings season," for each quarter or 13 weeks, but the
"strength" or amount of that influence varies from little
to considerable depending how good those earning reports are...and
sometimes whether they are positive or negative. In addition,
let me remind everyone that the market "action" near these reporting
periods has "as much" to do with "future" expectations of earnings as
it does with the numbers being report...or even more so!
While we suspect that
the occasional "cycle inversion," where the big manipulators do
manage to "TRAP" pure cycle traders, is due to the overall
and "sudden" increase or decrease in earnings expectations, we
have no way of knowing that for sure. Therefore, even
with less that absolute periodicity, we still consider this
13 week trading cycle as "very well defined" and with "good to
excellent" periodicity.
<DOW and U.S. major indices: intermediate and near
term cycles>
<DOW and U.S. major indices: short term (13 week)
trading cycle >
BY
the way, while I'll not go to deeply into here, the U.S. has
a "very well defined" 5-Year Cycle in Government Bonds
, and this cycle appears in nearly all denominations, 2y, 5y, 10y,
and 30y, eventhough it is more pronounced in some than the others.
Now, whether you are a stock or bond trader and regardless
of your county of origin, I strongly recommend that you "save" of copy
of this to your local terminal, as it is one of the most important "economic
charts" you will even encounter.
<REVISIT the U.S.'s 5-Year Bond Cycle
Now, after a little
home work, it becomes clear that the real question is
not whether stock cycles exist, because they
"absolutely do," but whether their effect is measurable,
predictable, and useful in making near term and/or
longer term stock market forecast.
Like I just said, there are
many non-believers who are quick to denounce
the idea of any "repetitive" (periodic)
patterns, or "cycles," within the financial markets,
and boldly proclaim their support for the "random
walk," or "chaos," theories, but I not only "think"
they have it all wrong, but I know they have it wrong!
Therefore, as you might well
expect, we make extensive use of trading, market,
economic, and business cycles in our analysis.
As a matter of fact, I have been at this
for a long time, and I can assure the Nay-Sayers
that their pessimistic ideas are totally misguided,
for whatever that's worth. Reasonable people
can argue all day over why they occur, but I
believe they are far to obvious to be brushed off by anyone
willing to spend even a little time reviewing the "very
strong evidence" that supports this theory.
Now, IF I was to "show you" CLEAR
evidence of an economic cycle that is currently predicting
a future major low in the stock market and
recession low in the economy, and which HAS
BEEN proven 70%-90% accurate, within +/- 2 years
over the last 100 years, would knowing that
in advance be of any value to you? Hum! Well,
I do know it, and it's so obvious that anyone who
doesn't "know it" is going to feel like a total idiot
when they "SEE IT" for themselves.
Needless to say, that is not a free-bee.
IN
the introduction to the cycle’s section
of the review, we explain the key characteristics
of cycles and waves, which are not one
in the same.
We also identify the key cycles
common to the major cycle theorist of the
twentieth century, and maintain a table that
projects future time periods for "theoretical" peaks
and troughs (highs and low). With this table
summary, we can "see" where these "reported" cycles
cluster together and form "probable" real world cycles.
This introduction, is fairly extensive, and probably
one of the best primers on the Internet. A "screen
shot" of PTR's cycle introduction menu is at this next
link .
<Screenshot: PTR's
Cycle Introduction menu:
NOTE that on this graphic,
at the link above, there are menu selections for some extensive
information on William C. Garrett, including an
"in depth" review of his Torque Analysis thesis, on J.M.
Hurst including a "look" into his work with Spectrum
Analysis, and C.E. Cleaton's work
with "regression models" for stock data.
<PTR's Intermediate Term
Trading Cycles: DOW 2/16/2006 >
AT
the PriceTime Review, we do our own
cycle work, which is based on
W.D. Gann's cycle analysis,
J.M. Hurst 's Spectral Analysis,
and a very small portion
of
William
C. Garrett 's work with "Torque Analysis."
We also rely
on one outside sources to "firm," or help mold,
our opinion on the near term "static" cycles within
the market.
By the way, IF you are just
looking for information on either J.M.
Hurst or William
C. Garrett , and/or their work with
Spectral Analysis
and Torque
Analysis , our SUBSCRIBER'S
INTRODUCTION to Cyclical
Analysis has a massive section
and a "detailed" review of both men and their key works.
In this introduction, I detail why 80% to 95% of their work was faulty,
and clearly detail why that is true...but in highly technical,
and mathematical, terms.
Eventhough, both men's key
works are nearly without merit, the process that these two pioneers
went through did uncovered some key methods, thesis, and ideas
that still withstand the test of time.
At PTR,
while we will never just paste in parts
of another advisors comments, we do let our readers
know that we have formed our opinion after reading
the latest comments from the services we subscribe
to. If any of these services post comments that
we feel should be seen by our subscribers exactly as
they were publish, we will ask the author for permission
to use the information and provide it only if that permission
is given.
Periodic Cycles are
clearly one of a small group of powerful force, including
economic fundamentals, that excerpt "significant influence" on
the world's financial markets, and we keep abreast of
the best information relating to them.
By the way, J.M.
Hurst was an aeronautical engineer, and
used both scientific and mathematical methods
to determine that stocks do indeed have a "strong
tendency" (my words) to repeat in a periodic (reoccurring)
sequence.
William C. Garrett was also an engineer by education
but a stockbroker by profession, and while
he used methods different then Hurst, he arrive at
essentially the same conclusion. And, the conclusion
these two pioneers in cyclic and harmonic analysis
of stocks trends arrived at was mainly just a detailed
description of what W.D. Gann had been saying since 1909.
Needless to
say, part of the process for using cycles
is identifying them in a particular stock
or index. That is to say, just because a
certain cycle is common for many, or even
most, stocks and/or indexes, it doesn't mean it will
be a valid factor (influence) for the one stock you
are interested in.
Also, while I don't
know about you, I want to see some recent
evidence that even the most "apparent" of the well
know cycles are still around and working, since
I don't believe they are cast in stone, so I like
to run my own analysis from time to time.
At PTR, we use Digital Linear Filters,
Fourier Analysis, Fast Fourier Transform
, moving average "smoothing,"
Sine Regression Analysis, Spectral
or Spectrum Analysis, and they are
all identified in the "Cycles" section of the review. In
addition, this next link, below, shows a good example of our methods.
<U.S. MARKETS: KEY 5 Year "rate" cycle...Spectrum
Analysis >
IN the introduction to our
Cycles section, we will reveal why we believe
that the key "Stock Market" cycles are factors
of four and eight (not binary), with the highest
order harmonic of "about" thirteen weeks.
Now, before anyone starts searching for
thirteen week cycles, they need to read the introduction,
and become aware that what is "usually" visible
in the market is the "resultant" (composite),
or combination of more then one cycle, and not the single,
"pure," cycle itself. However, that is "usually"
only true in trends, and the single cycles "many
times" do show themselves "very well" during corrections
or transision periods to Bear Markets, and at other times
when volatility is high.
In the introduction, we also explain
our theory for the "standard wave model,"
which is strongly influenced by the periodic market
and economic cycles. This model accounts
for the cyclical model (5x3 or 3x5 by 4:1 Fourier Synthesis)
and the Bull and Bear Market "offsets" that that we
believe the "Stock Market" has a "good" tendency to
follow.
Unfortunately, we cannot claim this
is a "very strong tendency," eventhough, it
does seem to be correct a lot more often then not.
Do cycles go negative like electrical
"sine waves," or is there an axis always above
zero? Hum? It took a lot of "playing" with
the mathematics to find out the answer to that question,
and we will tell you what we found out in the cycle
section introduction.
Periodic cycles do exist, some static
and some "fluid," and so do Gann Anniversaries
and Elliott (Fibonacci) wave rhythms.
There is little to no doubt they are "one
force" in the market that needs to be considered,
or a trader, and/or investor, will, "most likely," pay
the price for failing to do so.
At PTR, we do not deal with the short-term
cycles (less then 89-91 trading days--13 weeks)
unless there is a special reason to do so, since they
are "usually" more likely to "influence" a group
or industry than the whole market, and our cycle
work focuses "mainly" on the indexes.
Therefore, anyone doing short term trading
is not going to get by with just our cycle work
alone, and we list some of the cycle experts we
have confidence in, at a list on the subscribers menu.
"They,"
whoever "they" are, say that a picture
is worth a 1000 words, so here is one that
is worth 100,000 words if you already know how to
use it. It shows the key 4-Year "Presidential Cycle" and the
40-Year Gann Master Cycle...which will "very likely" end up
being confirmed as PTR's Technology Innovation Upgrade Cycle.
.sometime in the not to distant future.
<Longwave historical stock cycles...US
Dow Index 1896-2006>
<Seasonal and Intermediate
Term trading cycles: 2/2006>
<DOW Industrial
Average: Near Term Trading Cycles-- 3/06>
The "full"
identity of the key short term trading
cycle and the underlying , or root, CYCLE ENGINE for
the stock market is available to subscribers only. However,
here is a
DOW chart
from our "Free Analysis"
that gives those with serious brain power some excellent
"hints."
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--Please scroll down
to continue--
NEXT PAGE
P4 OF P6
RISK MANAGEMENT
STATISTICAL AND HISTORICAL ANALYSIS
ECONOMICS AND FUNDAMENTALS
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All material contained herein is
orginal content, except as noted, and Copyright(2003-6)
PriceTime LLC, or it's editors:
Andrew J. Quiggly or B. Bonfoey
-all rights reserved-
certified and recorded for record on January
22, 2006
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The
vast majority of information that we discuss and
the opinions we state in regard to that information can be
considered a form of "forward-looking statements," very similar
to those identified in Section 27A of the Securities Act of
1933, as amended, and Section 21E the Securities Exchange Act
of 1934, as amended. Such forward-looking statements are
made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995.
"Forward-looking statements"
describe future expectations, plans, results, or strategies
and are generally preceded by words such as "may," "future,"
"plan" or "planned," "will" or "should," "expected," "anticipates,"
"draft," "eventually" or "projected."
You are cautioned that
such statements are subject to a multitude of risks and
uncertainties that could cause future circumstances, events,
or results to differ materially from those projected in the forward-looking
statements, including the risks that actual results may differ
materially from those projected in the forward-looking statements
as a result of various factors.
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