Wave market analysis
by Bryce T. Gilmore
In part one of this article (February 1988), we examined four turning points—[W], [X], [Y] and [Z]—in
the trend of Coffee, Sugar and Cocoa Exchange Sugar-World #11 contract. We looked at time cycles and
retracements and focused on the support and resistance levels they created.
This month we'll examine seven more analyses that could have been performed on the same data to detect
the four turning points.
Figure 1: Weekly Trend Wave.
A detrending analysis chart can be a great asset when evaluating the potential risk attached to a
time-and-price entry point. I detrend using short, medium and long-term price differences. The exact
amounts depend on your experience.
The way to read this chart is simple:
1. When all waves are in a downtrend trade only short.
2. When all waves are in an uptrend trade only long.
3. If the shorter waves are diverging with the long wave expect a possible reversal to trend.
4. Strength of trend can be evaluated by the position of each wave either above or below its center line.