We have tested the validity of Esoteric Cycles with 50 years of data on the main indices and have never seen this indicator fail to give advance warning of topping and bottoming action. It doe not predict exact tops or bottoms as that is a Fool’s endeavour. Once you identify market turning points, you can position yourself for the next move. At times you might get in a bit early, but as the saying goes to the early bird comes the worm, the late the bullet.
Esoteric Cycles works incredibly well with our top stand-alone indicator, otherwise known as the trend indicator. As stated our objective is not to look for the exact top or bottom, but to get in or out when the market is either Bottoming or Topping. Trying to locate the exact top or bottom is best left to people who thrive on failure and have plenty of time on their hands.
Technical analysis is an Art
In order to be able to benefit from esoteric cycle analysis, one needs to visualize the cycle, and then one needs to determine if the Esoteric Cycles are oscillating up or down, if they are oscillating down, then the money is made by spotting a sell signal and shorting the markets; a sell signal is usually issued around the peak of the cycle. A sell signal does not mean that the markets are going to nosedive; you are still going to get up and down movements; nothing just drops in one shot. Markets move up and down in waves.
If you can master Hurst’s cycles you will come one step closer to understanding esoteric cycles. If you did not understand a word I said above don’t worry about it. There are many tools out there that can you can master and use to your advantage. Think of trading cycles in terms of a picture. If you can spot the pattern in the picture (all pictures have a pattern), then it’s infinitely easier to identify the trend of the market. Once you know the trend, the rest is as easy ass taking candy from a baby.
Other articles of interest:
Stock Market Bull 2019 & Forever QE (June 13)