Chip,
The cycles I utilize are simple period cycles, with the origination dates set by the master of cycles himself, J. Favors. In his comprehensive work on cycles, he found that key cycles to be concerned with on a shorter term basis are 16, 22, 26, 36.2, and 73.76 Day cycles. I've plotted these cycles on my software, and have the key cycle turn days for the next few months. I have set these cycle lines to trading days only (weekends and holidays excluded from the counts). The results have been uncanny for the past 6 months.
I had always put more effort and emphasis into EWA , but after recently auditing the validity of the signals given by these cycles, I realized they were hitting the turns more accurately than i was with wave analysis.
For example, the 73.76 day cycle high came in on Jan. 12th, predicting an important high would be put in place that day. The high that day was 1285.50 on the futures, and no close has exceeded that high to this day.
The 36 day cycle high came in on Feb. 3. The high that day was 1282.5 basis March futures, and that price level has not been seen since.
More recently, a 26 day cycle low came due last Thursday, suggesting one should buy the low of that day. A record breaking rally ensued. A 22 day cycle high came in the following day (Friday), suggesting one should sell the high of the day. A dramatic sell-off ensued from the highs of the day.
Today was the next turn day, with a 16 day cycle low due at today's lows. This strategy recommends a buy-in at today's lows, with stops set one tick under the lows of the day (basis NYSE). If today's low is taken out, an inverted cycle sell signal would be given. I've noticed and Favors warned that cycles yield inversion buy/sell signals roughly 30% of the time. When they do, these are quality, very tradeable signals.
I'll be glad to provide more info. if OPTIONS JERRY thinks it's ok (after getting permission from Iqbal himself, of course! <g>).
Regards,
David
P.S. By "noise", I assume he is referring mainly to his own posts...... No "noise" of disagreement from me!! ;o) |
