forecasts by cycles correlated to index

Hi friends,

A few days ago some friends in the VPG thread where I had normally posted requested that I put my personal thoughts on the price movement of XJO and to post in this thread.

Since I'll not be posting on HC for an extended period of time ( need time off), I thought I'll post this chart for those who were asking for it..and hope they will find it interesting.

In order to get a glimpse of the future, I tried to analyse the XJO for all its cycles since 2006, and then plot the sum of the dominant cycles and backtest for correlation between the cycle peaks( and lows as well )with the XJO index peaks ( and lows as well ). If the tops and bottoms of the cycles were well correlated with index peaks and lows in the past since 2006 till current, then there will be a higher probability that the future cycles will likewise depict future peaks and lows. ( Of course we know that the past does not equate the future...we are talking about projections and taking a stab into the future and nothing else ).

I've drawn the XJO price bars inside an envelope or band, while the cycles chart is the drawn as a solid black line on the same chart.

On the basis of this simple correlation test, I have drawn arrows from the cycle peaks to the XJO index and as you can see, there is a very high correlation between the cycle peaks and the index peaks.( If you do the same for the lows, they are also highly correlated ).

On the chart, I have also displayed the projected future cycle peaks and lows so that you can read off the chart and get an idea of trading activity of XJO in July, August and September- using this chart as a simple guide.



As usual, a forecast is just a projection, It isn't written in stone, but since the past trends were highly correlated, I thought this chart might be helpful to those asking for my personal thoughts on the XJO. At the same time, my analysis may or may not be totally flawed, and it should only be treated as content for entertainment purposes only:)See my disclaimer below my signature line!! Cheers!

May the best prices be yours,

dascore