As you may have read within our first section, or "Market Cycles" tab, the premise and power of The Market Forecast comes from knowing where stock market cycles will be over the next few days, weeks, and even months.
For predictability purposes however, it's not enough to simply look at price
action alone. Other data, such as sentiment, underlying market breadth
numbers such as new high/lows, volume, along with others, can help improve
the prospects for even better forecasting accuracy.
When all are combined and analyzed, the results help us create other cyclical
graphs that can really pinpoint "turning points" in the stock markets. Let's
examine those briefly (for more information, be sure to download the FREE
ebook "No More Guesswork").
The Forecast charts contain four "cycle lines" labeled - momentum short term, intermediate, and long term. Since cycles oscillate above and below a zero crossover point, the scale on the right reflects that as a percentage with the numbers, -100% to +100%.
Each chart is updated each morning before markets open, and contains a full three months of data. We show that three month period of time because it is roughly the amount of time it takes the intermediate term (our most profitable cycle to trade) to form one full cycle - the period from bottom, to top, and back to bottom.
One of the most important aspects of these charts is the formation of "clusters".
Cycle Clusters And Big Market Moves
About 3-4 times each year, the intermediate, short term, and momentum cycles will move simultaneously (or nearly so), deep into the lower reversal zone (-80 to -100%). When that occurs, it represents an exceptional buying opportunity wherein markets will typically move UPWARDS 10-20% over the following 4-6 weeks.
Should the long term cycle also join that cluster formation, expect sustained gains that can be upwards of 30-50%, just as we saw after that four cycle cluster in March 2003, and more recently, in March of 2009.
For more information about playing those clusters, watch the videos: VideoTraining