We work with Cycles in the markets. 100% of the time, you can count on Cycle Highs and Cycle Lows. The question is when?
In the Indexes, there is a 15 to 26 bar Trading Cycle from low to low.
All Trading Cycles have an Alpha Cycle and Beta Cycle from low to low. The Trading Cycle is the Beta Cycle Low. Most all Trading Cycle lows happen below the SMA. Our CycleTrader CT 07 SMA Detrend is modified to help traders see this. We measure both the distance the prices went above or below the SMA.
We then plot a blue dash line to show where it closed on that bar. We look for the detrend to go below the SMA. (RED), then for each new bar's low to be higher than the last after 15 bars. Sometimes, it can extend these bar counts. Or even happen before, but for the most part, it is 15 to 26 bars.
So, next time you are looking for a low, watch this pattern.
The chart below is a mini NQ 5 minute chart.
Again, we look for a move below the SMA, and then the lows of the detrend to be higher to confirm the Trading Cycle Low.
Remember, there the market will typically make a cycle high, (Alpha) and low (Alpha low), then many times, the Trading Cycle Low can be smaller. This is your signal to wait for to buy the markets.
This pattern works in all markets. All markets will have a different cycle count, but in general, this is the count you would look for.
The CycleTrader Pro CT 07 SMA Detrend helps you see these cycles better because we show the distance the prices went above or below the SMA and hold this value.
You can read a book my father Walter Bressert wrote about his work about the alpha and beta cycles. Trading Cycles exist.