Short Term Trading Member Forum

[dindindon]

Re: Cycle inversion

pmiles: "So I believe that a cycle inversion (a new high when there should be a low) means that the next larger cycle has peaked and that the cycles above that have "tipped". Comments welcome"

Natural frequencies and resonant frequencies are two different physic phenomenon. Natural frequency is the frequency at which a system naturally vibrates if there is no outside interference; Resonance is a condition in which a vibrating system responds to a driving force. It is the tendency of a system to oscillate at a greater amplitude at some frequencies than at others. These are known as the system's resonant frequencies.

Since the stock market encounters many driving forces that is not act on in sync with the underlying natural frequency, therefore, the cycle inversion and phase shifting is understandable but hard to predict in a reliable way. The injections of QE, 'Twist’ with Operations, and market rally on Draghi comments are obvious examples that natural frequency can be overridden. Imho, to sort out these responses is a tough task and usually invites a self-inflected frustration.