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27
Example Studies
1.21 Market Index Studies
Market data for this study and the following 12 charts covers 36 years of the daily S&P 500 cash index
beginning from January, 1970. The data source was Yahoo (Metastock data format). Data were
compressed to weekly (so we will be looking at weekly data not daily). Your first step is to select 4 or 5
cycles from the group of cycles Techsignal™ has found that encompass your investment or trading horizon.
Chart 1 (below) shows 5 selected cycles plotted individually, cycles which also happen to be commonly
found in the stock market: the 8wk, 13wk, 20wk, 40wk, and 76wk (1.5 year). You start your analysis by
looking in the Grid Analysis area below the price plot to find the longest cycle which Techsignal™ found that
interests you or meets your time frames. You then examine it to see how well it is phased or matches up
with a recent price high and low, to see if any phasing is required (shifting the cycle plot a bit to the right or
left to better match recent price activity; phasing does not change the cycle period).
There appears to be a fairly close match by eyeball, so no phasing is required. By looking at individual
cycles first you can sometimes spot a nest or confluence of cycles coming together in one time frame, such
as we see here for a low somewhere in the May time frame and again in early 2007.
Chart 1
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