Understanding Cycles – how they work

Natural cycles that occur in all aspects of life are governed by the time factors found in our Solar system and are recurring periods of time of specific values. It is important to note they can exponentially increase in duration as time moves forward.

Individual markets such as the S&P 500 will contain their own cycles that are the time periods between particular data points and can vary in duration. They are related to the natural cycles in that they are the harmonic parts – in various forms, of these cycles and will ultimately align with a complete cycle at a reversal. The greater the cycle usually results in a more important reversal.

SP-500 Planetary cycle alignment with SPX cycles

SP-500 Planetary cycle alignment with SPX cycles

Cycleforecasts uses research into both of these types of cycles to determine when the S&P 500 may be subject to the factors required for a reversal to occur. The analysis is based on historical data, market data points and cycle types.

The methodology is based on the research of WD Gann and other renowned market timing analysts, while also applying our independent analysis to current S&P 500 market behaviour. WD Gann’s work explored cycles and the relationship between time, price, and market behaviour.

Cycles influence both short-term and longer-term market movement. Cycles originating from significant historical data points or lesser importance data points will have differing effects. The various cycles will produce different results.

The effect of a cycle also will depend on:

  • Current market structure
  • Broader trend direction
  • Volatility conditions
  • Time and price alignment
  • Whether the cycle supports or opposes the existing trend

Cycle forecasting requires knowledge of the specific cycles, an understanding of how time needs to be calculated and what activates a cycle for it to be effective. This is critical as there are many cycles operating concurrently, however activation triggers are critical for a given cycle to work and explains why some cycles will work and at other times they will not be effective.

From originating data points, specific calculations can project future timing dates where the market may encounter either support or resistance that will lead to an S&P 500 reversal.

Intermediate magnitude cycles enable minor and intermediate reversals to be more easily determined due to more recent historical data being available and reliable.

The dates of major reversals require much greater historical data which is not always complete or accurate. However when larger cycles appear to align with intermediate cycles it is noted in our reversal forecasts.

Quotes by WD Gann

“The limit of future predictions based on exact mathematical law is only restricted by lack of knowledge of correct data on past history to work from”

”Every movement in the market is the result of a natural law, and a cause which exists long before the effect takes place and can be determined years in advance. Everything moves in cycles as a result of the natural law of action and reaction. By a study of the past I have discovered what cycles repeat in the future”

“It is just as easy to figure 100 years or 1000 years in the future as one or two years ahead, if you have the correct starting point and know the cycle which is going to be repeated”

 
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Guide to market cycles

Cycleforecasts research that has been conducted over many years has resulted in a method to precisely determine market reversal dates. Many years of historical data is required for this analysis to be performed and the theories of past renowned market analyst’s have been drawn upon to achieve these results. The dates of minor and intermediate reversals are predictable as recent historical data is available. Major reversals require historical data often not reliably available or accurate. However, on some occasions specific cycles do have greater effects and are noted in our forecasts.

(1) A cycle calculated from an original impulse point will radiate, at quantifiable periods, points in time that will cause markets to encounter support and resistance.

(2) These points in time can be calculated using specific time calculation methods enabling precise dates to be known in advance when these times of support and resistance will occur.

(3) On occasions, data points relied upon in our analysis that are on a non trading day, and are not a valid data point, will result in an inaccurate result.

(4) As with interim data points occurring on non trading days so can the date predicted be for a non trading day. In these cases the market reaction will occur on the trading day before or after the predicted date, such as the Friday or Monday.

(5) Other markets containing similar components will often have the same reversal dates. This will also occur in indexes and their derivatives.

(6) The magnitude of a cycle’s effect can be influenced by the position of the market or its structure, and whether a cycle is compounding an existing trend or acting against the prevailing trend. Major reversals occur at Significant Time and Price alignments. Consecutive – opposing cycles cause volatility and unclear trend direction.

(7) Unexpected significant events can cause extreme market movements that can cause a cycle failure. These events will then become data points affecting future market movements.

(8) Our analysis is based on the SPX and the DJIA, however significant movements can occur in their derivatives during out of exchange hours crossing over to the following day thereby registering a reversal point on the following day.

(9) Cycles that are responsible for single day and multi day reversals can be accurately predicted. These are within the scope of this service and are ideal for short term trading opportunities. Typically there are 2-3 trend changes each week.

(10) There are specific cycles that commence and complete major trends of years in duration such as the 2023 Low originating from over 2000 years past. Reliable information and data is not available to accurately provide forecasts for these dates. However these cycles align with the minor cycles at times of major trend changes.