Unique Perspectives

Trend & Cycle Decoded 
(Condensed version) 

“To everything there is a season, and a time to every purpose under the heaven” (Eccl 3:1)

You really do not want to know the future because if you did, you would simply be a robot fulfilling that future “plan”. There would be no free will, no choices and no mystery.

In trading markets, we can measure trends and cycles but what we are really doing is probability analysis. We do not absolutely know the outcome, only a probable result. However, in longer term trends and cycles, the probabilities become more reliable. 

First, some supporting background information.


Trend & Cycle Decoded

Mathematician Jeffrey West describes trends and cycles as follows: 

“From appearances, price movements appear not random, but chaotic. These apparent chaotic conditions are a tangled web of cause and effect creating innumerable variables and probable outcomes. This is the defining characteristic of chaos, but within this web of chaos, it does have a certain structure. Decoding and defining investing behavior and its variables reveals tell-tale signs of this group structure, its mass (force) and direction. These results are probabilities of varying strength and force depending on the length of the trend or cycle. Longer cycles equal a greater reliability of a probable outcome.

This group behavior and structure is otherwise known as the “herd instinct” and it depends on a large group participating in this trend of boom and bust.” 

Group dynamics, structure and behavior create geometric, mathematical trends and cycles. This is not unlike spiders spinning their geometrically perfect webs with no apparent awareness of their amazing feats. As the web grows larger, the picture becomes more complete revealing the beauty, harmony and balance of nature’s proportions.

Trend & Cycle Analysis 

The primary object for serious traders and investors is to first determine the posture of the time frame clock trends (daily, weekly and monthly) for any index, stock or commodity you wish to trade and act accordingly.
 
Market Pendulum’s Trend and Cycle analysis is a first class methodology that helps decode this market structure, behavior and process. 

All the cheerleading in the world does not change a trend or cycle. Patience, money management skills and attention to the mathematical trend evidence is still required

The "Time Frame Clock" trend methodology is more fully described in the Pendulum Trader.

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The Powerful GPS Indicator


Most of our technical outlooks are supported or influenced by Pendulum Project's proprietary GPS indicator, a methodology we have used for 2 years.

Built on many years of research and development, this GPS is uncanny and precise while being uncommonly profitable in its results. The indicator makes all other SAR type indicators obsolete and, in some ways, tracks a trend all by itself.  

This remarkable GPS tool clearly demonstrates and confirms a trend, particularly in higher time frames. It has characteristics best described as follows: 
  • Amazing reliability and confirmation properties
  • Most effective when prices are in a trending mode and there is a positive weekly and/or monthly trend present
  • Legendary results are found in the weekly and monthly time frames

Here are two examples.

 ARIA Daily


XAU Daily 


This technical tool is only displayed in the Personal Chart Service program of Bonanza Gold.

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Count On It 


Is there another perspective that may assist investors in waiting for value to be recognized?

Here are three historical stories of perseverance in the face of adversity. They all demonstrate unrecognized value and a vision that was not apparent to those around them at the time.

Continued here
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Bonanza Gold
The Pendulum Project PTD Formula 

Making predictions is always inherently dangerous but more reliable in longer term trends as fully described in "Trend & Cycle Decoded" above. 

Please review before continuing.


Let’s say a great stock, index or commodity has been in a monthly downtrend for some time. 

The question is, when it bottoms out from that monthly bear market, what minimum price objective (MPO) will it likely achieve? And secondly, when will that event occur? 

Our Price, Time and Distance (PTD) formula answers both those questions with a probability bordering on certainty. This time frame trend methodology clearly demonstrates great precision and results. 

Impossible and improbable, you say? Is this some kind of magic trick, hocus-pocus or slick maneuver?

No, it’s the real deal. Many have already arrived at their MPO as verified and witnessed by all members

So how is it done? 

A brief introduction, charts and results is here.
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Insights of Interest 

”Put it before them Briefly so they will Read it, Clearly so they will Appreciate it, Picturesquely so they will Remember it, and above all, Accurately so they will be guided by it.” - Joseph Pulitzer.


There is a considerable amount of data and information on this website and in the Pendulum Trader Collection. Here is a brief collection of insights, analogies and opinions drawn from various Market Pendulum articles that may be of interest.

Read more here... 

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 One Forgotten Fact

Most gold and silver investors have lost sight of one critical fundamental fact. 

The government has a lot maneuvering room and you don’t.

For example:

  • They can print unlimited amounts of money to pay the bills. You can’t because counterfeiting is illegal and jail time is involved.
  • They can rob Peter’s account to pay Paul’s account. You can’t because Peter has run out of money.
  • They can steal bank accounts to pay for bank insolvencies. You can’t and would go directly to jail if you tried.
  • They can “restructure” the bank’s holdings in their favor. You can’t and have great difficulty understanding their fine art of restructuring.
  • They can jack up equity markets just to make you feel “good”. You can’t and would be found guilty of market manipulation if you did. 

How reassuring!


Simple Trading Logic 
“Simplicity is the ultimate sophistication” – Leonardo da Vinci

An awareness of time frame trends is critical to the success of any investment. In my view, it is my gold standard for trading in context and setting

Most investors ignore this context, deal only with the daily fluctuations and forget about the effect of higher trend forces on lower trends. 

Key Points of Logic
  • Determining if the daily time frame is positive is the vital first step before moving on to higher time frames.
  • A positive TDI weekly posture is a key metric and “steering mechanism”. Without its positive force, any investment will have less potential and power.
  • Trading should always occur within the context and setting of the next higher time frame to determine the duration and durability of the current trade. This is a simple and logical exercise. 
  • If your preferred trading time frame is not positive, stand aside. 
  • One can claim to be an early contrarian or value investor. Be sure the time frame trends support that outlook.
  • One can also claim to be ahead of the herd. If you are riding ahead of the herd, take a look back every now and then and make sure it’s still there!
  • All the cheerleading in the world, with notices of impending moon shots and other assorted nonsense, does not change adverse trends and forces.
  • Predictions or forecasts based on other than the mathematical trend evidence are false and should be ignored.

We can avoid disillusionment, despair and discouragement if we ask ourselves one simple question. What is the trend? 

Trend Context

A trend, whether positive or negative, always starts first in the daily time frame, before any possible migration to other time frames.

If the daily trend is positive but both the weekly and monthly are negative, the lifespan of the daily is clearly limited because the stronger trend forces are pressing down on the daily time frame and limiting its progress. That is why the daily fails. 

If a failure occurs it pays to wait until a new daily trend is again identified before considering reentering. At that time, review the status of higher time frames. 

Trading in Context

Trading should always occur within the context and setting of the next higher time frame. For example, the weekly trend is 5 times stronger than the daily. The monthly trend is 22 times stronger than the daily.


Upon achieving a positive weekly (and later, a monthly) overall trend power is enhanced. This allows for a longer duration in the trade and a larger potential profit.

Logical Conclusion

If one truly understands this simple time frame trend concept, one is already miles ahead of the crowd.

Simple trading logic and in plain sight all along.

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BreakPoint
 
To avoid the inevitable, there will be alternatives proposed, laws adopted and delaying tactics implemented. This will result in:
  • Change we cannot believe in
  • Solutions we cannot trust
  • Transparency we cannot see
The math does not lie and a breakpoint will indeed come. On a dark night a few years hence, the empire of debt will end with a probability bordering on certainty. 

Let us return to the freedoms the constitution guaranteed us, the history of gold which financially guide us and the genius of common sense.

From Trader Garrett's 2013 BreakPoint

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Resources 

You will note there are links to Finviz and Investopedia, both of which are free.

Finviz offers charts of stocks, commodities, futures and forex, an economic calendar as well as financial data for stocks and news. This site is used by traders, investors and major financial institutions as a primary platform for market research. It is my first stop every morning for the general picture.

A guided tour is here.

Investopedia is an important resource for explanations of investment terms, an extensive financial video library and various useful investing materials. Their focus is educational

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