trends by cycles and possible trade action

Hi friends,

By finding the various dominant cycles and plotting them all on one chart together with some cyclic projection, I find there are 5 dominant cycles acting on the XJO as shown on the chart. Out of these 5 dominant cycles, the 3 shorter term cycles are down, leaving the long term and very long term cycle as up,and so on balance there appear to be more cycles of shorter term nature acting to pull prices down in the short term.



Is it useful and profitable to trade the cyclic turning points?

As to the usefulness or otherwise of using curvilinear cycle envelopes to find turning points on the XJO to trade the index, I've marked the entry points ( circled in green ) and the exit points (circled in red ) when the price index touched the lower channel band ( for entry ) or when the price index touched the upper channel band (for exit ).

As you can see, it appears the entry and exit points were reasonably profitable for cyclic traders....so there is some use in the cycles after all, especially the short term cycle at present.

Just my tuppence worth of thought about the direction of the cycles and of picking some cyclic trades:), cheers!

dascore