The Cycle Model
The Cycle Model
Every security may be classified into one of four cycle phase quadrants – Accumulation – Up quadrant (A), Advancing – Advancing quadrant (B), Distribution – Down quadrant (C) and Termination – Terminating quadrant (D).
The Cycle Gauge takes a time aspect into account by indicating a number after the cycle phase. For example, A7 means the stock (or index) is now seventh day (or week or month depending on the time frame) in it’s Accumulation phase. A trend’s maturity may thus be judged and the relative risk to reward ratio may be evaluated.
By examining the cycle phase of a group of securities in a market (or sector), an excessive reading of D phase (D%) may often lead to a market rally while an excessive reading of B phase (B%) may often lead to a market pullback. Such a tool enables us to often anticipate turning points in the market ahead of the actual turns.
Every security may be classified into one of four cycle phase quadrants – Accumulation – Up quadrant (A), Advancing – Advancing quadrant (B), Distribution – Down quadrant (C) and Termination – Terminating quadrant (D).
The Cycle Gauge takes a time aspect into account by indicating a number after the cycle phase. For example, A7 means the stock (or index) is now seventh day (or week or month depending on the time frame) in it’s Accumulation phase. A trend’s maturity may thus be judged and the relative risk to reward ratio may be evaluated.
By examining the cycle phase of a group of securities in a market (or sector), an excessive reading of D phase (D%) may often lead to a market rally while an excessive reading of B phase (B%) may often lead to a market pullback. Such a tool enables us to often anticipate turning points in the market ahead of the actual turns.
posted by Equities Analyst at 6:05 PM
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