V. 19:11 (38-43): What Can Market Cycles Tell Us? by Tim W. Wood, CPA

The Secrets Of Cycles And What They Can Reveal What Can Market Cycles Tell Us? by Tim W. Wood, CPA

Everything in nature moves in cycles — the solar system, the migration of geese, sleep patterns. Of more immediate interest to traders are cycles in the agricultural and financial markets. Cycle analysis is the one approach that can provide relatively accurate time and price projections.

"Usually, the effect of cycles is of only passing interest to market analysts and traders, unless the cycles in question are related to market prices and can be used to identify tops and bottoms of price movement movement and give indications of future price activity.” — The Power Of Oscillator/Cycle Combinations, by Walter Bressert. That is the challenge the cycle analyst faces.

Bressert continues, “Cycle analysis of the futures markets assumes that at any given time, current fundamental information is relative only to the current price structure, and that fundamental events will occur to move prices in the direction of the cycle.” Such an event might be a government report that greatly changes the supply or demand picture; money supply figures; utterances of Federal Reserve officials; foreign purchases; crop failures or freezes in any part of the world; war or the threat of war; or unexpected political action such as embargoes, tariffs, or price controls. These and many other unforeseen factors can alter prospects for the future.