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Cycle Analysis... a way of looking at price action.


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Cycle Analysis... a way of looking at price action.

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  #21 (permalink)
 glennts 
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So, what to expect? The white arrows point out how the 24 Hr ma shows the Multi-Day rotation. On this last turn up that ma is aligning with the Blue ma that represents the trend of the higher time frame Multi-Day Cycle. Compare the slope of this section of the white ma with the earlier white ma up moves. This alignment is showing a lessening of momentum that often precedes a break of the higher time frame support.

This chart is an update of the above earlier comment and a modification of yesterday's analysis based on subsequent price action.




The white arrow marks the "alignment" mentioned in the above quote and if you follow the path of the white 24 Hr ( 4 period ) ma you will see it attempt to pull away from Multi-Day support only to return, align briefly and then break thru support. This is behavior that is a characteristic of the Multi-Week price rotation. On the MW upside 24 Hr time frame areas of S/R will be above MD areas of S/R and when the MW rolls over, it is below. Although the discussion behind this behavior is initially complex, recognizing this behavior in the simple terms of " is it above or below " helps you quickly find your place. This is true with any Dominant / Minor Cycle pairs. As an exercise, plot a 60 min SMA and a 360 Min SMA. If the 60 is below the 360 the High of the Day is to your left and the new low is somewhere off to the right.

Yesterday the "A" bar low and the "B" bar high was discussed as a possible 24 Hr cycle Low / High. On this chart price then fell into "C" pushed up to "D" and has since taken out "C". So, if A was a 24 Hr Low could "C" be another? Not after only two bars. "D" is clearly a 24Hr High therefore "C" must be the low to be paired with that High and "A"/"B" is shrugged off as an expression of the volatility price has been presenting us with as this flag develops.

With the 24Hr below the MD there are no more excuses for price to not push lower.

Keep in mind that Roll Over is here and numbers will change with the 09-22 contract.

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  #22 (permalink)
 glennts 
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This is a link to a video from 15 years ago that touches upon comments in the prior post about moving averages helping you to understand higher time frame / lower time frame relationships. The original was made with flash and has been converted to MP4 so I apologize for quality and sound issues.


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 glennts 
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This video from 15 years ago is a deep dive into the underlying theory of Cycle Analysis which is The Summation Principle.

Knowing there were conceptual overlaps between cycle theory as applied to market analysis and the use of sine waves by electrical engineers, I spent much time digging around the internet and eventually met Alex McEachern ( https://mcelabs.com/ ) who provided me with the program that is the basis of this video. Alex has consulted with nations around the globe about stabilizing their national power grids, his inventions are used to monitor/regulate power on the ISS, and he developed a device that measures the frequency of vibrations in sky scrapers as a means of detecting earth quakes. Guy's got a brain. When he saw the video below and recognized the conceptual overlaps we had more wonky discussions about Stochastics, Fourier Transforms and Cycles which got me much further down the road in my own understanding of price action.

This is several videos combined and it gets pretty dense in the later sections so it's not casual viewing. The references to the "Minor Cycle" is based on the NY RTH session which was my focus before switching to the 24 Hr Globex Session. Ask questions and you'll get answers.


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 tradepips 
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glennts View Post
This is a link to a video from 15 years ago that touches upon comments in the prior post about moving averages helping you to understand higher time frame / lower time frame relationships. The original was made with flash and has been converted to MP4 so I apologize for quality and sound issues.


Thanks for sharing the videos!

I followed the suggestion in the "Basics and Techniques" video using a 1 minute chart with a black 5 minute SMA, a yellow 15 minute SMA and a magenta 60 minute SMA and this is what I got.

The chart has some notes applying some of what was mentioned in the video to today's price action.


1 minute chart with cycles

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 glennts 
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With the 24Hr below the MD there are no more excuses for price to not push lower.

Simple but effective.

This basically starts off as a simple moving average cross but most people have no luck with that approach and that is due to using random lengths for moving averages. Lengths that have no justification. When you use your indicators in a way that reflects the cycles you are tracking they then become tools that contribute directly to your understanding of the evolving story.



On this 1440 Min chart the white circle shows where the earlier comment suggestion of Mid- 40's... the trend line... originated. Below price is the dashed green line of the 15 Day Donchian Channel Middle... a 50% retractment of the move out out of the 5/20 low. Will that do it for this decline? This is the 14th day of what historically is a 15 day rotation. You'll notice on the 15 Day Volume Profile on the right there is not much to offer in this current area. If the look back is increased to include two additional weeks you get this:



The white horizontal lines at those 3 high volume nodes extend back in time to the high volume areas of earlier days. Notice the upper of the three at today's close and the lower of the three at the Donchian Channel Middle ( 50% retracement )

The Stochastic at the bottom show the correction of the Multi-Week Cycle actually began last week with the Lower Multi-Day High.... just as it is supposed to.

Ask questions, get answers.

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 glennts 
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Although the discussion behind this behavior is initially complex, recognizing this behavior in the simple terms of " is it above or below " helps you quickly find your place. This is true with any Dominant / Minor Cycle pairs. As an exercise, plot a 60 min SMA and a 360 Min SMA. If the 60 is below the 360 the High of the Day is to your left and the new low is somewhere off to the right.





In the 24 Hr Cycle its Dominant to Minor Cycle relationship is to the 6 Hr Cycle. This Minor Cycle can be as short as 5 or as long as 7 hrs and it's rotation accounts for the major swings you see each day. I've added a count under the 60 Min Time Blocks to highlight this rotation. Projecting when this cycle is likely to find its next low or high and then fitting that into an expectation of when the 24 Hr Cycle is likely to turn can give you a reason to pull an all-nighter.

"If you don't want random outcomes, don't make random decisions."
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  #27 (permalink)
 richw 
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Thank you for your posts. They are interesting to me. What would your 24 Hr Cycle analysis look like for MYM/YM at present?


glennts View Post
In the 24 Hr Cycle its Dominant to Minor Cycle relationship is to the 6 Hr Cycle. This Minor Cycle can be as short as 5 or as long as 7 hrs and it's rotation accounts for the major swings you see each day. I've added a count under the 60 Min Time Blocks to highlight this rotation. Projecting when this cycle is likely to find its next low or high and then fitting that into an expectation of when the 24 Hr Cycle is likely to turn can give you a reason to pull an all-nighter.


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 glennts 
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richw View Post
Thank you for your posts. They are interesting to me. What would your 24 Hr Cycle analysis look like for MYM/YM at present?

I don't follow the YM but knowing it has a high correlation to the ES the analysis would be almost identical.

Work up a chart showing what you think is going on with the YM and post it here and I'll add comments if necessary.

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  #29 (permalink)
 glennts 
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An attempt at a low is being made...which is not the same as a low is being made.

Notice the Cumulative Delta is curiously positive.


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 richw 
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Oh, I just realized I was looking at 6E on your post, but I thought it was ES and was wondering why the prices were so different. I think price is well extended down into areas that I look at and am expecting a rebound. I will share something when I can get a few minutes.


glennts View Post
I don't follow the YM but knowing it has a high correlation to the ES the analysis would be almost identical.

Work up a chart showing what you think is going on with the YM and post it here and I'll add comments if necessary.


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