Cycles Analysis

[wavepicker]

For those interested in Cycles Analsysis, last year in October I posted a chart with a forecast for the DJI based on Cycles Analysis by The Foundation For the Study Of Cycles based on FFT.

This called for a significant decline in the months ahead and has followed the forecast pretty much to script. I have attached this chart again(1st chart) for those interested. I should note that this information went pretty much unnoticed on this forum at the time, which to some extent IMO actually added more weight to the forecast due to extreme bullish sentiment.

The Foundation has now released further forecasts covering a whole host of markets ranging from commodities, USD, Gold, DJI to name and few I have attached them for those interested.

As mentioned back then this is not exact timing but rather medium to longer term forecasts. Furthermore these projections also show confluence to the EW patterns that I have seen in the last few months as well as my own Cycles Analysis strategy(which differs from the one used in the charts attached), especially in the case of Gold and the USD which IMO have both been in topping and bottoming patterns.

Of course there is no certainty in market forecasts, but these charts maybe a shock to the expectations of some.

Regards

Wavepicker

 

[wavepicker]

and the USD Index

 

[Porper]

Of course there is no certainty in market forecasts, but these charts maybe a shock to the expectations of some.

Regards

Wavepicker

Thanks for posting this Wavepicker, certainly a shock forcast alright

So basically they are saying we are going to have a crash, down to 8000 for the DOW by November.That is a pretty big call, but the way things are looking fundamentally maybe not such a tall order.

 

[wavepicker]

Thanks for posting this Wavepicker, certainly a shock forcast alright

So basically they are saying we are going to have a crash, down to 8000 for the DOW by November.That is a pretty big call, but the way things are looking fundamentally maybe not such a tall order.

I would not place too much credence on the price levels but rather the approximate time of the peaks and troughs, that is what is important.

 

[RichKid]

I would not place too much credence on the price levels but rather the approximate time of the peaks and troughs, that is what is important.

Thanks WP for those charts and the tips on how to use them, it's good to have confirmation in this form, it adds to the weight of odds.

 

[tech/a]

Well some opportunity there!

 

[josjes]

WP, would be good to have a similar chart like the one at the top - DJIA daily for the next 6 months. Do you have it ?

Also, the charts prediction are long term over 20 years, question is how accurate are they ? e.g on the 20-40 months DJI chart it's all good and well to draw the sine-wave on top of the historical chart, but did the chart predict accurately back in 2000 that it is calling a top in 2007 ?

November 2008 is the Presidential Election month, how likely the USA have a crash when voters turn in to select their President ?

Many thanks.

 

[Porper]

Just had a look at their website http://www.techsignal.com/cycles/index.htm

Very interesting, only had a quick look but a very different method of prediction to say the least.Apparantly counting wing beats of various birds can revert back to prediction of cycle analysis.

On the face of it the examples they give do have good accuracy.Will have to look deeper into the site to see how honest it seems.

I note that they do sell software, haven't found a price yet.

Seems a nice site, not tacky at all.

 

[explod]

Thanks for putting these up Wavepicker and to see your action, should make for an interesting thread.

 

[wavepicker]

WP, would be good to have a similar chart like the one at the top - DJIA daily for the next 6 months. Do you have it ?

Also, the charts prediction are long term over 20 years, question is how accurate are they ? e.g on the 20-40 months DJI chart it's all good and well to draw the sine-wave on top of the historical chart, but did the chart predict accurately back in 2000 that it is calling a top in 2007 ?

November 2008 is the Presidential Election month, how likely the USA have a crash when voters turn in to select their President ?

Many thanks.

Josjes, Unfortunately I don't. I don't even have access to the software, just posted charts for info.

I would NOT place much faith on price level from these charts but rather pay more attention to the approximate timing. That is what caught my eye, especially when i compared it for confluence to my own. The overlayed sine wave(s) in my view should be viewed as being dimensionless.

It's important I think to know how these charts are constructed and I think it would be something along these lines:-

1
Each cycle is isolated, and those that are repetitive and have the largest amplitudes are considered first. The fit of each cycle to past data is also computed and this is also included in the selection process. From the foregoing, 20 cycles (on average) are selected from the data series for examination.

2
In the second phase the statistic reliability of each cycle is tested. The object here is to exclude cycles that have been influenced by random events e.g. wars, sudden catastrophes, etc.

This is done using the Bartels Test which is a measure of the stability of the amplitude and phase of each cycle. It provides a direct measure of the likelihood that a given cycle is genuine. The closer the cycle statistic is to 100%, the less likelihood it is that the cycle is not genuine and has been influenced by random events.

3


Individual Cycles are then added up to form a composite.


In this case only 1-2 long term cycles have been considered. Nevertheless they give useful information.


Visit the site that porper has just posted for more info. As far as I know you cannot buy the software, it is leased.
As far as I know there are only three sites that offer this type of analysis, this one and also: http://www.cycletrends.co.za

Cheers

 

[explod]

Interesting that special events need/are excluded. The current financial dynamic that is currently unfolding is a world wide phenomena on a more catastrophic and larger scale than any past financial event. I would argue that such a dynamic, in this instance, will overide the predictive reliablilty of the wave theory, which is bascally past experience.

Compared to some my knowledge is rudimentary but sufficent to know for example that the US$ ( and, sorry, we have been on this before) will continue to crash to a level of almost worthlessness in the next few years as the problems within that economy are more revealed and unravel.

 

[josjes]

Martin Armstrong Economic Confidence Model is also one that I follow with strong interest.

In over 30 years of research he developed a model derived from the number pi (3.14159). Armstrong was able to make predictions years (!) in advance (almost) to the day. E.g. he called the Nikkei top in the last week of 1989 and the ensuing spectacular crash, Asia crisis in 1997, the LTCM 1998 market crash etc.

Armstrong’s main cycle, the Economic Confidence Model, with the cycle
length of 8.6 years being calculated as pi 3.14159 x 1000 = 3.142 days. The
numbers are stating the year in decimal format, e.g. 1994.25 is early April 1994 and 2006.0 (2006 in the chart) is 1/1/2006. Of key importance are the 8.6-year highs and lows, all others are secondary.

Economic confidence is crucial for the development of the financial markets, especially of bubbles that can be defined psychologically as exaggerated and
unrealistic confidence. The two 8.6 year cycles 1994.25 and 2002.85 were troughs of the 4-year cycle, 1994.25 even to the day. The high 1989.95 was the Nikkei all-time high, 1998.55 the high of the stock markets before the crash into October 1998. The latest confidence top 2007.16 (= late February 2007) marked the bursting of the real estate bubble and the first subprime problems.

On March 22 2008 (2008.225 in the chart) we had a confidence low: confidence and sentiment measures dropped to the lowest levels in 5-10 years indicating a kind of an end-of-the-world sentiment.

From here on confidence (and the stock markets) should better into the 2nd quarter 2009 (April 2009 in the chart), however, from mid-2009 there is fire on the roof until 2011.45. BIG BEAR market one that will probably make 2000-2003 bear market like a picnic.

Interestingly, gold did set a major top in March 2008 8.6 years after the bear market bottom 1999. The end of the gold bear market was timed by 1999.625 in the model.

Armstrong refused to cooperate with the CIA in 1999. Understandably, he was not willing to give his proprietary cycles and programs to someone else. So on Jan 2000, he was imprisoned for 6 years without charges being pressed. Needless to say this is against the US constitution and everything supports the interpretation that Armstrong is a political prisoner. Hmm... conspiray theory ???

For those interested more on Armstrong's article see this:
http://www.contrahour.com/contrahour/2006/06/martin_armstron.html
or just google it.

 

[wavepicker]

Martin Armstrong Economic Confidence Model is also one that I follow with strong interest.

In over 30 years of research he developed a model derived from the number pi (3.14159). Armstrong was able to make predictions years (!) in advance (almost) to the day. E.g. he called the Nikkei top in the last week of 1989 and the ensuing spectacular crash, Asia crisis in 1997, the LTCM 1998 market crash etc.

Armstrong’s main cycle, the Economic Confidence Model, with the cycle
length of 8.6 years being calculated as pi 3.14159 x 1000 = 3.142 days. The
numbers are stating the year in decimal format, e.g. 1994.25 is early April 1994 and 2006.0 (2006 in the chart) is 1/1/2006. Of key importance are the 8.6-year highs and lows, all others are secondary.

Economic confidence is crucial for the development of the financial markets, especially of bubbles that can be defined psychologically as exaggerated and
unrealistic confidence. The two 8.6 year cycles 1994.25 and 2002.85 were troughs of the 4-year cycle, 1994.25 even to the day. The high 1989.95 was the Nikkei all-time high, 1998.55 the high of the stock markets before the crash into October 1998. The latest confidence top 2007.16 (= late February 2007) marked the bursting of the real estate bubble and the first subprime problems.

On March 22 2008 (2008.225 in the chart) we had a confidence low: confidence and sentiment measures dropped to the lowest levels in 5-10 years indicating a kind of an end-of-the-world sentiment.

From here on confidence (and the stock markets) should better into the 2nd quarter 2009 (April 2009 in the chart), however, from mid-2009 there is fire on the roof until 2011.45. BIG BEAR market one that will probably make 2000-2003 bear market like a picnic.

Interestingly, gold did set a major top in March 2008 8.6 years after the bear market bottom 1999. The end of the gold bear market was timed by 1999.625 in the model.

Armstrong refused to cooperate with the CIA in 1999. Understandably, he was not willing to give his proprietary cycles and programs to someone else. So on Jan 2000, he was imprisoned for 6 years without charges being pressed. Needless to say this is against the US constitution and everything supports the interpretation that Armstrong is a political prisoner. Hmm... conspiray theory ???

For those interested more on Armstrong's article see this:
http://www.contrahour.com/contrahour/2006/06/martin_armstron.html
or just google it.

Yes I follow that one too, unfortunately the bugger is in jail and much info on his work has all but dissappeared of the web!!


If you break down his cycles approach further you will notice another short term important date occurs on the 5th May. I also have an important Fib Cycle date for this as well which is based on calendar days.

 

[Whiskers]

Of course there is no certainty in market forecasts, but these charts maybe a shock to the expectations of some.

Regards

Wavepicker

Thanks for that wavepicker.

I'm shocked ... that someone agrees with me... or was that I with them.

I use some different cycle analysis as part of my projections which very nicely happen to agree with these particularly, POG and the USD.

Of course when you convert those cycles back to the XAO and AUD it's all .

 

[wavepicker]

Thanks for that wavepicker.

I'm shocked ... that someone agrees with me... or was that I with them.

I use some different cycle analysis as part of my projections which very nicely happen to agree with these particularly, POG and the USD.

Of course when you convert those cycles back to the XAO and AUD it's all .

No worries, I am happy someone else agrees with me too!!

 

[Whiskers]

Economic confidence is crucial for the development of the financial markets, especially of bubbles that can be defined psychologically as exaggerated and unrealistic confidence.

On March 22 2008 (2008.225 in the chart) we had a confidence low confidence and sentiment measures dropped to the lowest levels in 5-10 years indicating a kind of an end-of-the-world sentiment.

Now this guy Armstrong is talking more my language in terms of the psychology of the market. Good find josjes!

It is the confidence and sentiment factor that my 'proportion' analysis in the XAO thread was attempting to quantify in the big picture. I couldn't put timing into that quantum, but my retracement level seems good.

Another great (weather) forecaster that many people on the land came to respect was Indigo Jones who used different 'cycles' again... also different to my system.

From here on confidence (and the stock markets) should better into the 2nd quarter 2009 (April 2009 in the chart), however, from mid-2009 there is fire on the roof until 2011.45. BIG BEAR market one that will probably make 2000-2003 bear market like a picnic.

Josjes, you are the saviour of my soul. :bananasmi

I guess this is a good time to trot it out, uncle.

My main arguement why this downturn will not be as severe as some expect.

The residue will carry over for another day.

ROFLOL. That's a classic Whiskers - one to be trotted out in the near future
https://www.aussiestockforums.com/forums/newreply.php?do=postreply&t=6395

 

[wavepicker]

Whiskers.

I have found that what is most significant aspect of this model are the dates alone plus or minus a few days.

Rather than assume a high or low from from years/months earlier, it is probably more beneficial seeing how the market trends into these dates either bearishly or bullishly in anticipation of some type of pivot upon reaching that date.

Also one can also break the model down into smaller cycles i.e:
- 1.075yrs
- 0.538yrs
- 0.269 yrs

for use on smaller timeframes when counting from certain highs/lows as well as the dates Armstrong has listed in the article. Also bear in mind that not all the major highs and lows are represented by those daes in the article

Cheers

 

[soso]

Martin Armstrong info http://princetoneconomics.blogspot.com/

 

[Whiskers]

Whiskers.

I have found that what is most significant aspect of this model are the dates alone plus or minus a few days.

Rather than assume a high or low from from years/months earlier, it is probably more beneficial seeing how the market trends into these dates either bearishly or bullishly in anticipation of some type of pivot upon reaching that date.

Also one can also break the model down into smaller cycles i.e:
- 1.075yrs
- 0.538yrs
- 0.269 yrs

for use on smaller timeframes when counting from certain highs/lows as well as the dates Armstrong has listed in the article. Also bear in mind that not all the major highs and lows are represented by those daes in the article

Cheers

Thanks for the tips and insight again, wavepicker... actually everyone, cos there is something to be learned from everyone whom you meet on, or crosses your path.

Actually, the main system of cycles I use has day, month and year cycles that interlaces with other cycles... that just happen to agree with these.

I'm in a bit of a jovial mood today, cos it's a significant, fun, insightful, 'lucky' day... ie if I am tuned into my karma.

Actually, there is no such thing as 'luck' or coincidence. Everything happens for a reason... and to that extent the universe is not random... it is cycles!

 

[Kauri]

Actually, there is no such thing as 'luck' or coincidence. Everything happens for a reason... and to that extent the universe is not random... it is cycles!

Plurry Penny-Farthings here..

Cheers
...........Kauri