Wednesday, August 4, 2010

The ARC of Worry. Will it Break?

Here is a chart that I have not posted for a while. These cycle arcs can be UNCANNY at predicting termination of cycles.
  • Draw a radius from a previous low to a high (or vice versa) In this chart we use the February-April Cycle.
  • Extend the radius to the right horizontally.
  • Connect the radii using an arc from the low point to the horizontal point
  • Where the ARC intersects the horizontal should be a termination point of the cycle--OR--if prices break below the arc the cycle could be terminating early--being over-powered by a longer term cycle--i.e. Bear cycle of 2007-2009.
  • Note how the Fibonacci sections hit the trend changes, especially the June 21st high and July 1st low. This enhances the credibility of the cycle arc immensely.
Watch for prices to break the arc, which would STRONGLY suggest a termination of the current uptrend.

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