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It is fundamentals that move the markets, but you have probably noticed that the fundamental picture is the most bullish at tops and the most bearish at bottoms. Cycle analysis of the stock, financial and futures markets assumes that at any point in time, the then current fundamental information available is relative only to the current price structure, and that fundamental events will occur to move prices in the direction of the cycle. Such an event may be a government report that greatly changes the supply / demand picture; money supply figures; utterances of Federal Reserve officials; foreign purchases; crop failure or freeze in any part of the world; war or the threat of war; unexpected political action such as embargoes, tariff, or price controls which can change the supply / demand picture. These and many other unforeseen factors can alter the prospects for the future. Cycle analysis does not pretend to forecast what will happen in the future, but that events will occur to move prices in the direction of the cycle.

Unfortunately for the market analyst and trader, cycles can contract, expand and even skip a beat now and then. Despite its limitations, cyclical analysis is the one approach that can provide relatively accurate time and price projections weeks, months, and years into the future. Additionally, intraday cycles in multiple time frames can be combined to determine the trading trend, anticipate time periods for tops and bottoms of intraday cycles, and forecast intraday trend reversals.

The ProfitTrader™ cycle-based trading methodology offers powerful tools that often allow for early identification of cycle highs and lows. Once a high/low has been identified, the component parts of the cycle are used to set time expectations for the next high or low. Cycle analysis can be readily learned through the application of the ProfitTrader™ methodology and software.

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