Trading Insights

Trading Insights

The time cycles of the debt limit crisis

Trading Insights
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The time cycles of the debt limit crisis, fascinate me. Mainly because the markets - forex - equities, are not supposed to have any order in these environments. The moves are taught to be irradic moves. You shouldn't find any predictive meaningful cycles or patterns in them as it is a herd of people all processing information at the same time, based on the minute by minute digestion and processing of the available trading information.

In short - how could anyone say with any certainty what the markets would do?

The world is too chaotic - one move to the next - one moon cycle to the next.

It's filled with Osama's and Obama's - it's filled with Irans and i-rate extremists. They are all prone to go on TV or YouTube at any point in time and disrupt the natural flow and ebb of the trading universe. There's no way we can say with any certainty that the market will go up or down or sideways a few minutes in advance, let alone a few days in advance, right?

One look at that chart with one short definition puts a huge wrench in our perceptions, though. The definition being that the green dots, the red dot, represented "predictions". Predictions that were a week old. They were saying, seven days before the market ever got to that point in time - "we should go up, now"...."we should go down, now".

After watching this now for 3 years, and working with hundreds of customers that are watching for these same time cycle patterns in their own day trading - I can say with reasonable authority that these cycles exist. People trading 44 tick charts, and 240 charts, are all walking away saying the same thing,

"The markets are not random".

We'll keep watching these longer time cycles. They are great harbinger of turns, and even good filters for identifying trend direction on shorter time frames. There's no telling what else we'll find as we continue to explore the time cycle indicators.