Friday, February 1, 2013

Gold Cycles

This is a series of clips on cycles from the Canadian Securities Institute Level II technical analysis course that unfortunately is no longer offered. The three qualities of Cycles are Magnitude, Period and Phase. Magnitude is the measure from cycle peak to trough, Period is the distance between the cycle’s troughs and Phase is a measure of time location of a cycle trough.

The Five Cycle Principles are Summation, Commonality, Variation, Nominality and Proportionality. Summation is the simple addition of all active cycles. For example, a 20 day cycle is made up of two 10 day cycles The 10 day cycle is made up of two 5 day cycles, etc. All price patterns are formed by the interaction of two or more different cycles. Commonality is when the peaks and troughs of cyclic fluctuations are time synchronized.

On other words if we can spot a security or commodity that is printing short and long term cycles with the peaks or troughs closely aligned then we could have and important juncture setting up. In the case of gold our chart illustrates a weekly or intermediate cycle trough occurring at the same time as a pending long term monthly trough – the last time this occurred was in mid 2009. Enjoy 


Steve B said...

Great post, informative.

Is the cycles material you mention available anywhere?

thx said...

Hello Steve B - I use the Coppock Curve which is a cycle formula introduced by Charles Coppock, the founder of Trendex Research in San Antonio, Texas,and later used by the great Ian Notley who with Don Stark founded the RBC Trend & Cycle dept. The curve is not widely used and is best suited for long term studies

Bill Carrigan