Investors and market watchers have long been fascinated by the idea that shares move in cycles with a regular amplitude and length. Nobody has ever been able to satisfactorily explain why shares, indexes, commodities, currencies and derivatives should move in cycles, but there can be no doubt that they do - the empirical evidence is overwhelming.

Just as we can predict the future in natural events such as seasons and human activity (hormonal cycles), so too it can be shown that business and stock market cycles also exist.

Obviously, if we accept that shares are cyclical, then it becomes important to try and understand how these cycles work, and where a particular share (or other data stream) is within its cycle. If you can do that, then you are in a good position to predict where it will move next with a better than even chance of being right. Cycle Trends has shown that time cycles are the major determining factor in bull and bear markets.

The Old School

Over the years there have been many methods developed for analyzing cycles in shares - such as The Elliot Wave, W.D. Gann, Delta, Granville's Market Clock and many others. All of these theories have one thing in common. They all seek to impose a more-or-less rigid cyclical structure onto the dynamic and ever changing share market.

This means that they will appear to "work" some of the time when the market moves within their particular framework. But equally they all "fail" regularly. These "failures" are explained with an ever more complex matrix of named exceptions and deviations, but this is of little comfort to the investor who has bought in on the strength of their predictions.

The Cycle Trends Approach

Cycle Trends differs from these traditional wave and cycle theories, because it does not begin with a pre-exisitng framework into which the data must be squeezed, but rather begins with the raw data and searches for whatever cycles are actually there. Once a cycle has been found, Cycle Trends attempts to establish its "strength" or reliability as a predictive tool.