Replies to post #7117 on A.I.M. Users Bulletin Board (AIMUSERS)

[lostcowboy]

Hi Qarel, I would be interested in your spreadsheets, if you could email them to me, I would appreciate it. I am interested in how you used the cosine.

I think this is the first Long term, fine detail look at the Lichello cycle, and it is bringing attention to what I conceder to be a important point.

Bernie has long been a believer in buying once a month. Tom on the other hand has been using GTC orders set to the next buy and sell point. It may be that using a GTC set to the next buy point is not a good idea, it may be much better to set it to at least 10% below the last buy or some other percent.
In the original Lichello cycle, you have a drop from,
10 to 8,a -20 percent
8 to 5, a -37.5 percent
5 to 4, a -20 percent
And you have raise's from,
4 to 5, a 25 percent
5 to 8, a 60 percent
8 to 10 a 25 percent .
As you can see you have lots of room between the buy's and sell's. If I am reading your statement right, the closer the consecutive buy's or sell's are to each other the worse AIM performs.

[OldAIMGuy]

Hi Q, As many stock price patterns tend to follow a sine wave, the Lichello price example isn't too bad. There's a slowing of the rate of drop near the bottom and a slowing of the rate of rise near the top.

It could be faulted by being overly ambitious with a 60% loss from a former peak, and overly wild with a 150% rise from its lows, but actually most Tech Stocks have now shown this is a reasonable range.

Best regards, Tom

[lostcowboy]

Hi Qarel, Think you for the spreadsheets. I think I found why the cycle stops. It has to do with the Set Point. You need to add a new column, Set Point = PC/SH. Then chart it. What you see is the set point bouncing around at first and then settling down at around $8.3. This has the effect of starving AIM, smaller sells, smaller cash reserves, smaller buys, until you run out of money. In my old AIM spreadsheet, with the old data the set point keeps moving between $9 and $5, with out settling down. I will try to do more testing tomorrow with more degrees of separation between the data points.