PriceTeam

[PriceTeam]

Y2Kate: I have been testing my intuitions in a fairly scientific way over the last 5 years and have found they are not reliable signals. I *wish* I could report otherwise. On the other hand, what works well for me is the intuitive pull in one direction or another, which I then research and confirm.

We have to be careful when looking for market methods. Because the probabilities are essentially 50/50, it is really easy to think some method is working because it delivers the correct signal. I tested this recently on mysticalball.com, asking questions about the market. I asked 3 important, specific questions, and all turned out correct.

1. Will the swine flu pandemic blow over and be a nonevent as far as the market is concerned--at least in the near term? (Asked this question right after the news came out.) Mysticalball said, "My sources say yes."

2. Will the market climb above SPX 900? Mysticalball: Absolutely.

3. Will the FAZ trade be successful? (This was another one a couple weeks ago.) Mysticalball: Yes.

So the accuracy was 100 percent!

I asked the same questions the next day, and got the opposite answers, so it doesn't really work in my opinion. It simply creates a wonderful illusion. Many analysts create similar illusions with their work--even fooling themselves into thinking they know something!

Here's a good introduction to Hurst:

www.decisionpoint.com/TAcourse/Cycles1.html
www.decisionpoint.com/TAcourse/Cycles2.html

I'm still testing the value of these cycles. At times they can lead to confusion when the market diverges from the cyclical ideal. Hurst is not the easiest guy to understand (you know, one of those engineer-types) but he gave us a breakthrough comprehensive understanding of market behavior.

I'm counting August 2007 as the last 4.5-year cycle low, and March 9 as the last 80-week low. So the current cycle configuration--as I see it--is as follows:

4-year: UP
80-week: UP
40-week: UP
20-week: Just approaching the zenith, soon pointing DOWN
10-week: Bottoming, soon pointing UP
5-week: Bottoming, soon pointing UP

Ted