A digital stock exchange panel lists several stocks along with related metrics.

Trading with Cycles

As this site attempts to convey, there is an undeniable cyclicality to life… and to the markets… and to the economy… and to droughts & floods… and to geopolitical struggles… and to earthquakes & volcanoes… and to manias & crashes, etc.  There is a time – and a cycle – to everything.

What does the 3rd chapter of the book of Ecclesiastes say (later popularized in 1965 by The Byrds)?  …To everything there is a season and a time

Cycles measure time.  As such, they also measure time between related events and ‘seasons’ in life.

That brings up another perfect example of cycles: Seasons… (also known as ‘climate change’ – 4 times per solar year).  The seasons of the year provide a textbook archetype of many of the larger seasons in life (fractals)… all of which are cyclical.

But that is not the point of this discussion…

Trading Cycles

Many of the visitors to this site have one primary objective – learning about trading with cycles.  With respect to that pursuit, I have some good news & some not completely good news.  First, the not completely good news:

I do not believe that trading with cycles – on their own – is a prudent approach to the markets.

In order to understand why, please see ‘Cycles Intro’.

HOWEVER… (now for the good news), there are several trading tools – that when integrated with cycle analysis – provide a more effective approach to trading/investing.  It is the synergy of these complementary approaches that enhances the use of cycles… and makes them viable.

The majority of those tools are technical (chart-based analysis) and provide much clearer and more easily defined signals and risk points for trading and investing.

Setting the Stage

In contrast, cycles provide a foundation on which to construct a successful approach to trading.  They are the backdrop.  They set the stage.

They are like viewing a Map App before a road-trip begins (or just viewing a map or road atlas, for those not fully in the digital/tech age).  The approximate timing & distance are identified – often with great precision – but the specific nuances, landmarks, detours, freeway entries & exits, etc. are not recognized until the ‘driving directions’ part of the app is activated and the driving has begun.

Although a user might not see it, that is when a host of other indicators kick in – attempting to pinpoint every twist & turn in a journey (or trend)… which brings me back to the focus on technical analysis…

There are many specific tools that can be used to enhance the effectiveness of cycle analysis and to take it to a practical level.  We use a proprietary combination of indicators – most of which are revealed to our subscribers – in order to achieve this goal (see Tech Tip Reference Library for specific indicators, including their calculation, illustration and implementation).

Bottom Line

Cycles are an extremely valuable tool for timing overall events… but they should be viewed as a tool, with specific uses.  Other tools are usually necessary to complete each task… and other indicators are necessary to effectively trade the markets.

In the case of my approach to trading, I use specific ‘setup’ signals, ‘trigger’ signals & ‘confirmation’ signals – in that sequence – to help validate cycles and take them to a practical level.  These are explained in various sections & pages on this site and at www.insiidetrack.com.

And, with regard to any analysis that refers to the markets or investing, it is important to remember:

   Futures Trading & Speculative Investments Do Involve Substantial Risk!

An old-fashioned roman numeral clock with the hour hand lying between 9 and 10.

Cycles Intro

In order to prevent a misunderstanding of cycles – or at least our approach to cycle analysis – it is good to start out with a quick summation of what cycles are NOT...

They are NOT perfect.

They are NOT an investment or trading strategy, in and of themselves.

They are NOT a stand-alone tool.

They are NOT the Holy Grail.

Rather, they are a foundation… a foundation on which a better understanding of our world can be based... a foundation on which a better understanding of the markets and market movement can be based... and a foundation from which a successful speculative or investment strategy can be erected.

What cycles ARE... is a measuring and projection of time assuming (as has been proven time & time again) that “history repeats itself”. However, do not expect history to repeat itself in the same fashion, at the same place, and in the same degree, as it did originally.

If it did, it would indicate that all of life is simply revolving in a circle.Instead, life (the markets, etc.) should be viewed as a spiral–constantly revolving in a circular pattern BUT never returning to exactly the same spot from which it came.It is progressing – forward & upward – even as it revolves in a type of circuit.

So, in reality, history replicates or resembles itself. It mimics or mirrors past events... but does not provide an exact repetition of those events.And since this can often occur very surreptitiously, it is critical to know WHEN to expect those replications. That is where cycles come into play.

The question is often posed: Why rely on cycles? The same could be asked of clocks & calendars: Why use them? And, the answer is the same… The reason for applying cycle analysis is to have a gauge of when certain events can be anticipated… even if the exact event is not known. In the case of market analysis, the reason for applying cycle analysis is to utilize a time-tested approach to timing shifts in mass psychology & market movement.

For those that are skeptical toward this approach, stop and think about some of the very logical reasons this is true.The most profound is human nature... and human longevity.For the last 3,000+ years, the average human life has been about 70 years. With that in mind, all one needs to recognize is how often ‘the apple doesn’t fall far from the tree’ or – when viewing the less desirable attributes in a life –'the sins of the father passed down to the son...'.

Within a family, many patterns – some more destructive than others – are repeated (replicated, but not an exact repeat) at regular intervals… usually when the offspring reach a similar age to when the offending act or behavior was first triggered by the parent(s). A similar 'cycle' occurs in societies, with mass psychology and behavior recurring at regular intervals – in ensuing generations. It is cyclical!There are many other logical reasons why cycles are a normal, natural recurring phenomenon (discussed in corresponding articles).But, their application is equally important...

Over the past two decades, this approach has been validated repeatedly with analysis published in 1999–2001 (anticipating war cycles and a 'surprise attack on America’s shores' for late-2001), in 2007 (describing the 17-Year & 34-Year Cycle of market crashes that was projecting a 1-3 year/35-50% drop in stocks beginning in October 2007) and in 2009–2011 (forecasting major earthquakes in Chile, Japan & N. America for the precise periods in which they ultimately occurred).

In the past decade, cycle analysis pinpointed a Major cycle high in Gold & Silver for 2011 and a subsequent low in late-2015.   All of these cited analyses were published for thousands or tens of thousands of readers well BEFORE the fact. And all of this corroborates uncanny & unprecedented cycles coming into play in 2018 - 2021 in the markets, the Middle East & the Earth!

There is a lot more to this discussion. For now, the important thing to recognize is that an overwhelming convergence of diverse cycles – ranging from those impacting the markets & societies, geopolitics and war, gold vs. fiat currency, to those governing crop production, food crises, earth disturbances and many more esoteric realms – occurs in 2018 - 2021.

The articles & analysis on this site barely scratch the surface of all that is coming together in the next several years… and how prudent individuals can and should prepare for this.That is not to advocate a 'Chicken Little' approach, but rather to encourage the type of action that one might take if a hurricane or major snow storm were bearing down on that individual’s residence & livelihood.

Readers often take one of two approaches – either making prudent choices & preparations for what could occur (based on numerous corroborating signs & precursor events) OR sticking their head in the sand and repeating to themselves 'I don't see any potential threat down here'.The choice is up to you.In either case, this should only be viewed as a starting point. There is much, MUCH more to consider.

With that said, I sincerely thank you for visiting this site and I genuinely hope that it is educational and beneficial to you... and to your understanding of the markets and the world in which they – and we – exist. I welcome any and all constructive comments although I cannot personally respond to most of them. If they do warrant a response, someone will be sure to get back to you as soon as possible.

And, for any analysis that refers to the markets or investing, it is important to remember:

Futures Trading & Speculative Investments Do Involve Substantial Risk

I wish you the best in all your market & personal endeavors.