V14.14 (670-674): MESA96, version 1.9

Product Review: MESA96, version 1.9

Even though engineer and software developer John Ehlers has marketed his MESA (Maximum Entropy Spectral Analysis) software for 14 years, he still comes up with refinements on a regular basis. For MESA96, he's built in adaptive window length, a modification in the way the program identifies the trend mode, and a gizmo called the sine wave indicator.

Before I elaborate, recall that the identification of cyclic content in a series of market prices was hindered by the need for lots of data until the development of a concept referred to as maximum entropy spectral analysis in 1975 by John Parker Burg, a concept he put forth in a doctoral thesis. In 1978, John Ehlers, an aerospace signals engineer, adapted the technique to market data so that 20 to 60 days of data were needed rather than the year or more necessary when applying a fast Fourier transform for data analysis. The MESA technique as implemented by Ehlers has since become a quantitative standard for cyclic analysis of prices. In fact, the technique (both Ehlers's trademarked version and other generic forms) can be found today in many technical analysis programs. However, traders who buy the MESA96 package to implement the maximum entropy technique get more bells and whistles, including spectral contour plots and 10-day price projections based on cycle analysis, than ever before. In addition, all the innovations certain to be added by Ehlers in future versions will be available for the price of a product upgrade, which runs about half the current product price.