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30
Chart 4 (below) shows 20 years of data and one cycle plotted, after first selecting the “20 Years of Data”
option for screen display from the button on the right side below the price plot. Our goal here is to evaluate a
longer term cycle and then add this cycle to our existing plot of 5 cycles.
From this chart, you have a chance to eyeball how well a 208wk (4 year) cycle Techsignal™ found matches
up or is phased with recent price highs and lows (recent is relative since we have 20 years of data
compressed onto this display screen).
Notice how well this longer cycle matched the lows seen around the three lows which occurred between
July, 2002 and March, 2003. It also showed a cycle high in the first quarter of 2000, and a low near the
October, 1998 market low. It showed a high after the 1987 high, but cycles more distant can sometimes
exhibit wobble as cycles expand and contract in longer time frames. They might be in phase in the distant
time frame and not in the current time frame, or vice versa, but usually not in both time frames. Important
here is that since 1990, the market has trended in the time frames expected by this longer term cyclic
projection. In other words, this cycle doesn’t need to be phased.
OK, so you might ask why this 208wk cycle doesn’t match up with the recent market high in early 2006. That
answer isn’t known, but the chart does strongly suggest that any surprises are likely to be on the downside
between early 2006 and early 2007. The market can also play catch up in a hurry. In circumstances like this, we
need to look to other technical studies for further help (charts below).
Chart 4
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