Reply #1: Today's Market WrapUp

[ozymandius]

Another Look at the 4-Year Cycle
BY TIM W. WOOD

s the market advanced up out of the June/July 2006 low, many began proclaiming those lows as having marked the 4-year cycle low. With the last obvious 4-year cycle low having occurred on October 10, 2002 at 7,197.49 and when the October 2006 low that most were expecting did not occur, most pointed at the June/July lows as having marked the 4-year cycle low. I can understand why on the surface most people would have thought this. But that was the easy answer for the market not making the low in October that so many were expecting. I can promise you that cycle analysis is much more involved than simply counting from one point to the next. By nature, cycles contract and expand. But, this expansion and contraction does not invalidate the cycle, as it is the overall ebb and flow, or rhythm, that makes the cycle. However, it is because of the fact that market cycles are not precise mechanical events that we must also incorporate other tools such as statistical analysis and the use of technical indicators.

http://www.financialsense.com/Market/wrapup.htm