Cycle analysis helps us to determine where we are in the current cycle to help steer us towards a higher probability set-up that matches our risk tolerance.
The ideal time to buy is at a cycle low.
* There are 4 cycle lows that we look for:
– The daily cycle low
– The intermediate (weekly) cycle low
– The yearly cycle low
– the multi-year cycle low
– The status of the yearly & multi-year cycles are the back drop as we monitor the interaction of the daily cycle with the intermediate cycle.
* Generally a swing low in the cycle’s timing band for a low has good odds of spotting the cycle low.
* Place Stop below the cycle low.
* Further confirmation arrives with a break of the declining trend line.
* The yearly cycle low provides the best opportunity of the year for gains.
* Next the intermediate lows (2 or 3 times per year) provide the next best opportunity for gains.
* Followed by the daily cycle low (2 to 4 per weekly cycle).
Cycle Bands
Uptrend Buy Signals
* A swing low above the lower cycle band.
* A close above the upper cycle band.
Downtrend Buy Signals
* A close above the lower cycle band.
* A close above the upper cycle band.
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