With torque analys of stock market cycles *

Table of Contents

How You Can Profit From a Knowledge of Stock Market Cycles

1. Price Cycles in the Market

The Genesis of Cycles

Price cycles derive from the tick-rhythm of opposed forces

Cyclical impulse waves follow a tick-rhythm breakout

Cyclical recoil movements follow exhaustion of an impulse force

Interim movements mark the shift from dominance of a cyclical force

Intra-day cyclical movements in individual stocks

Simultaneous individual moves create market cycles

The Harmonic Nature of Cycles

Market’s cyclical system is built of harmonic length cycles

Longer rhythms are harmonic combinations of shorter rhythms

How cycles combine

How to synthesize five cycles into one market pattern

The need to understand the cyclical system

Cycles promise to bridge the gap to the future

Four parts of the cyclical principle

How market cycles adjust to discordant situations

A Synthesis Reveals the Market’s Cyclical Nature

How cycles performed in discordant period prior to 1932

How cycles performed in the 1932-1966 periods of the 17 year cycle

The 17 year cycles divides business history into logical epochs

How longer cycles break down into logical epochs

How the 1928-32 cycle broke down into 17 month lengths

How the five-cycle synthesis matches weakness in the DJI

The 8.5 year cycle is a double 4.25 year cycle

2. The Forces and Framework of the Cyclical Structure

The Nature of The Volume Forces

Stock flows from seller to buyer

The flow of volume measures buying desire

How the cyclical field is formed

Why high prices are paid for stocks

Why closest pricebands in the field are the strongest

Volume flow determines amplitude and length of cyclical swings

In bull markets, the seller is more important than the buyer

How & why support & resistance forcebands form in cyclical field

Support/resistance bands & triangles are really volume accumulations

At harmonic levels

Volume action since the beginning of the DJI

How moving volume totals reveal long and short cycles

Volume plays on the market’s harmonic cyclical structure

The Invisible Mechanism of Cycles

A cycle moves because of a thrust against its own circumference

Characteristics and properties of the Fibonacci series

The trigonometry of a square and a triangle

Fibonaccis result from movement of the axis of a circle

Fibonacci ratio is a sum of a square, a thrust, and the phi additive

The Fibonacci Phi additive is a portable value

The mechanics of a thrust and a recoil

The Fibonacci values control the growth of a cycle

The Golden Section and the Great Pyramid of Egypt

3. How Volume Powers the Cycle Mechanism

Volume Alters Basic Cyclical Shapes

The effect of the quantity of volume on a cycle

When buying volume expands, selling volume contracts

Prices only indicate subsurface conditions

How one force can increase and also remain equal to its opposite

How epicycles “crack the whip” at market tops

Vectors in the Cyclical Field Are Controlled By Volume

Volume determines the angle of a cyclical vector

Vectors carry the thrust of small cycles to big cycles

Big cycles build because their “receivers are ½ phase out of sync

Vectors also measure the market’s condition

Cycles and the Random Walk, or the Effect of Randoms & Seasonals on Cycles

Cyclical analysis can assimilate technical, fundamental, & risk-factor anal.

How the cyclical field contains and tames random events

The elasticity of volume quantity contains the randoms

The seasonal pattern in average monthly volume

Why market crashes hot bottom in July and October

The reason why the “summer rally” has disappeared

Why the sixth month is the toughest in the tax-holding period

4. Torque Analysis of Stock Market Cycles

Basis for Torque Analysis: Price is a Liar

Torque analysis shows cycles as the yield from underlying balances

The formula for Torque analysis of cyclical strength

Torque analysis of cycles measure underlying forces, not prices

Two cycle radii do not always equal a cycle diameter

Opposed forces meet head-on but the effect is a right angle

Problems with Finding The Basis of Cyclical Forces

How to understand price movement contradictions

Why it is important to separate buying and selling volume

How to break volume into buying and selling volume

OXY illustrates the relationships of price and volume

An example of breaking individual stock volume into two totals

How advance-decline figures improve the visibility of price moves

Setting Up Statistics for Torque Analysis

Why moving totals should equal a cycle radius

The link relationship between numbers in a time series

How to compute the Torque factors of cycle forces

Why price divided by volume equals radius times force

Adjusting our cycles to practical lengths

The problem of lag in moving totals

The reason we use end-formed moving totals

What a chart shows us about lag in moving advances totals

The filtering action inherent in moving totals

What Charted Torque Statistics Reveal

Advances totals correspond closely to the Dow average

Volume totals remain closely balanced, except in large downswings

Buying causes stocks to advance; increased prices cause selling

Price-volume relationship is not a fixed ratio

DJI velocity index defines the price-volume relationship

Cycles derive from the balance of price-volume relationships

How Cycles are Revealed by the Price-Volume Relationship

How five cycles defined the 1970 trough

How chord of cycles acted in 1966-70 swing of 221 week cycle

Movements of small cycles vs large cycles

5. The Art of Forecasting with Market Cycles

Rudiments of Cycle Forecasting

Seven basic assumptions of cycle forecasting

Price cycles have two axes, thus follow a parabolic path

Time progression of trailing axis causes a Fibonnaci grid to form

Each mature cycle is a closed system of influence

Why price cycles pear down at cyclical troughs

Image of a new cycle derives from the peak of an old one

The Technique of Cycle Forecasting

How to establish the limits of cyclical swing

How cycles synchronize their clocks at cyclical troughs

How the Torque formula overcomes lag in moving advances totals

Forecasting the future by exhaustion of moving total values

Using extrusion to compare today’s market with older time periods

The Effect of Volume on Cycle Forecasting

The influence of economics on market cycles

Volume is cyclical, psychological, and seasonal

The seasonal pattern in volume figures

The cyclical pattern in volume figures

Seasonal-cyclical pattern of volume in the 1966-1970 market

6. How to Profit From Stock Market Cycles

Cycles Tell When Stocks are Cheap or High

Investing should be a business proposition

Markets of the future are likely to be cyclical markets

The effect of cycles in a trendless market

The teamwork between cycles and fundamentals

Swing with long-cycle trends because you can’t fight them

Commonality-the tendency of stocks to swing together

Convergence/divergence at work in major market averages

Individual issues indicate that cyclical pull is always present

The Dynamic Potential of Stock Market Cycles

Large cycles have narrow swings but broad effects on stocks

The 78-week cycle also has lots of cyclical “punch”

The 1966-1970 swing of long cycles and performance of control data

The 1966-1970 swing of the long cycles and the performance of Natomas

Fidelity of Cycles Defined By Torque Analysis

Response of GM to long-cycle pull

Response of Southern Pacific to long-cycle pull

Response of AEP to the long cycles

Response of GM to short-cycle pull

Response of Natomas to short cycles

Cycles Provide Perspective for Market Decisions

Effect of cycles on a stock with declining fundamentals

Effect of cycles on a stock with good fundamentals

Relationship of cycles and the Elliott Wave Principle

Index

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