The Most Powerful Market Timing Technique
I'll start off this post with a simple question: why do market technicians place such importance on "confirming" particular areas in a chart?
To answer this, we must first understand what confirmation is and what its purpose is. As simply as I can describe it, a confirmation is a technical process of elimination. That is, one can confirm a directional price change in trend by confirming that a continuation (at least immediately, relative to the time frame examined), is a technical impossibility. Through many hours of cumulative human observation, we have been able to derive rules that the market follows unconditionally. These types of absolute rules are few and far between, but knowledge of them is critical to swing trading pivot highs and lows, as well as a basis for having confidence in timing the market.
And that last piece is what confirmations are all about: they provide the swing trader with enough confidence to risk his or her monetary life without batting an eye in real time. To catch a major peak or trough within pips of the true high or low (especially in today's leveraged markets) is not only immensely difficult but is also a psychologically torturous undertaking. The outcome of success is immense wealth accumulation in a matter of minutes; no other platform exists in this world where one can turn their life around in such a short amount of time without it being a function of pure chance gambling (like the lottery).
In fact, if one can master the art of confirmation (which is to say that one can implement techniques like the monthly time cycle convergence displayed above), then it becomes possible for one to be nearly certain of achieving the highest form of monetary return that is offered in all of financial markets. I would say that a situation like the one we have here and presented above, offers at least a 90% chance of success; insofar as one can succeed in using short-term options leverage to catch the top or bottom of a major turn and yield something in the ballpark of 10,000% return in a week. At the very least, I'd say that the probabilities are such that the techniques are worth serious examination from serious investors with serious amounts of risk capital.
So now that we've covered what confirmations are and how they can be of enormous assistance to the patient swing trader, I'd like to discuss this so-called "Most Powerful Confirmation in Technical Analysis."
The technique is a simple trial-and-error test of a particular time period that is surmised to contain a "significant" sub-period of time that serves as a major turning point in markets. For example, my hypothesis is that December of 2021 contains a sub-window of time within the monthly time interval that contains the all-time high price in the S&P 500. My initial reasoning is unimportant; the point is that I have a hypothesis of a major directional change in markets and I want to confirm it as much as possible before I seriously consider acting on it.
Thus, I will first look to prior major peaks and troughs over the last 20ish years (Cycle, or Supercycle, in Elliott Wave Terms), and measure the number of months in between these points and the current month to see if there are any numerically-significant matches on at least three of them. What do I mean by numerical significance?
I mean that it is an observed fact that there exist certain additive sequences (like the Fibonacci Sequence) that ultimately dictate all price movements in free markets. I will not discuss the myriad sources and hypotheses that propose reasons for why this is; I am going to assume that the collective literature is proof enough of its apparent existence. In any case, my goal is to measure the number of months back to each major high or low and see if numbers like "21, 144, 233, 377, etc." come up in these measurements, and if so, how many of them are there?
In addition to fibonacci-number monthly counts are "natural roots and squares," whereby a monthly count is a number that can be perfectly squared or rooted to a whole integer. Further, if the root or square is geometrically significant (i.e. a multiple of 2, 3, or 5), then it may serve as a double-confirmed count and provide the swing trader with even more confidence to pursue his swing conviction. Lastly, if the monthly count on any historically significant peak or trough point in time is a natural root or square, is geometrically significant, AND IS ALSO a Fibonacci number, then you have a triple-confirmed count and even more certainty that the month under examination is a future cash-cow. An example of a triple-confirmed count is 144 months back because 144 is 11th fibonacci number, is also the natural square of 12, and 12 is of geometric significance because of its additive/multiplicative relationship with 3 and the root of 3 (which derives the mathematics of triangles and trines).
To wrap this up, the chart above shows that EVERY MAJOR PEAK AND TROUGH over the past 20 or so years spins out monthly time counts of numbers that are categorically relevant to the aforementioned criteria.
If I wanted to be even more precise than to say "December 2021 will contain the all-time pivot high," then I would conduct a similar analysis, but on a weekly timeframe using a lookback period of about 5 years. The peaks and troughs will be of one lower degree than those of the monthly analysis, but will similarly provide counts that all spin-out signficant numbers if the week that I am examining, is in fact, the correct week containing the major turn.
I call this iterative process of trial-and-error "Time Period Convergence" as a general umbrella term for this all-powerful type of analysis. However, the sky is the limit in terms of precision and one could theoretically work his way down to the exact second of the major turn if one has already confirmed numerically-significant counts on the monthly, weekly, daily, hourly (most important for short-term swing trading, FYI), 30-minute, 15-minute, 5-minute, 1-minute and 30-second timeframes, as long as one has access to live data that can feed in such timeframes.
Since I began with a simple question, I will leave you with a simple question: Do you think still think it's impossible to time markets?
-Cyc-Pig-lycal Convergence
SPX
IXIC
DJI
RUT
To answer this, we must first understand what confirmation is and what its purpose is. As simply as I can describe it, a confirmation is a technical process of elimination. That is, one can confirm a directional price change in trend by confirming that a continuation (at least immediately, relative to the time frame examined), is a technical impossibility. Through many hours of cumulative human observation, we have been able to derive rules that the market follows unconditionally. These types of absolute rules are few and far between, but knowledge of them is critical to swing trading pivot highs and lows, as well as a basis for having confidence in timing the market.
And that last piece is what confirmations are all about: they provide the swing trader with enough confidence to risk his or her monetary life without batting an eye in real time. To catch a major peak or trough within pips of the true high or low (especially in today's leveraged markets) is not only immensely difficult but is also a psychologically torturous undertaking. The outcome of success is immense wealth accumulation in a matter of minutes; no other platform exists in this world where one can turn their life around in such a short amount of time without it being a function of pure chance gambling (like the lottery).
In fact, if one can master the art of confirmation (which is to say that one can implement techniques like the monthly time cycle convergence displayed above), then it becomes possible for one to be nearly certain of achieving the highest form of monetary return that is offered in all of financial markets. I would say that a situation like the one we have here and presented above, offers at least a 90% chance of success; insofar as one can succeed in using short-term options leverage to catch the top or bottom of a major turn and yield something in the ballpark of 10,000% return in a week. At the very least, I'd say that the probabilities are such that the techniques are worth serious examination from serious investors with serious amounts of risk capital.
So now that we've covered what confirmations are and how they can be of enormous assistance to the patient swing trader, I'd like to discuss this so-called "Most Powerful Confirmation in Technical Analysis."
The technique is a simple trial-and-error test of a particular time period that is surmised to contain a "significant" sub-period of time that serves as a major turning point in markets. For example, my hypothesis is that December of 2021 contains a sub-window of time within the monthly time interval that contains the all-time high price in the S&P 500. My initial reasoning is unimportant; the point is that I have a hypothesis of a major directional change in markets and I want to confirm it as much as possible before I seriously consider acting on it.
Thus, I will first look to prior major peaks and troughs over the last 20ish years (Cycle, or Supercycle, in Elliott Wave Terms), and measure the number of months in between these points and the current month to see if there are any numerically-significant matches on at least three of them. What do I mean by numerical significance?
I mean that it is an observed fact that there exist certain additive sequences (like the Fibonacci Sequence) that ultimately dictate all price movements in free markets. I will not discuss the myriad sources and hypotheses that propose reasons for why this is; I am going to assume that the collective literature is proof enough of its apparent existence. In any case, my goal is to measure the number of months back to each major high or low and see if numbers like "21, 144, 233, 377, etc." come up in these measurements, and if so, how many of them are there?
In addition to fibonacci-number monthly counts are "natural roots and squares," whereby a monthly count is a number that can be perfectly squared or rooted to a whole integer. Further, if the root or square is geometrically significant (i.e. a multiple of 2, 3, or 5), then it may serve as a double-confirmed count and provide the swing trader with even more confidence to pursue his swing conviction. Lastly, if the monthly count on any historically significant peak or trough point in time is a natural root or square, is geometrically significant, AND IS ALSO a Fibonacci number, then you have a triple-confirmed count and even more certainty that the month under examination is a future cash-cow. An example of a triple-confirmed count is 144 months back because 144 is 11th fibonacci number, is also the natural square of 12, and 12 is of geometric significance because of its additive/multiplicative relationship with 3 and the root of 3 (which derives the mathematics of triangles and trines).
To wrap this up, the chart above shows that EVERY MAJOR PEAK AND TROUGH over the past 20 or so years spins out monthly time counts of numbers that are categorically relevant to the aforementioned criteria.
If I wanted to be even more precise than to say "December 2021 will contain the all-time pivot high," then I would conduct a similar analysis, but on a weekly timeframe using a lookback period of about 5 years. The peaks and troughs will be of one lower degree than those of the monthly analysis, but will similarly provide counts that all spin-out signficant numbers if the week that I am examining, is in fact, the correct week containing the major turn.
I call this iterative process of trial-and-error "Time Period Convergence" as a general umbrella term for this all-powerful type of analysis. However, the sky is the limit in terms of precision and one could theoretically work his way down to the exact second of the major turn if one has already confirmed numerically-significant counts on the monthly, weekly, daily, hourly (most important for short-term swing trading, FYI), 30-minute, 15-minute, 5-minute, 1-minute and 30-second timeframes, as long as one has access to live data that can feed in such timeframes.
Since I began with a simple question, I will leave you with a simple question: Do you think still think it's impossible to time markets?
-Cyc-Pig-lycal Convergence
SPX
IXIC
DJI
RUT
Operación activa:
Here is a great example (unless ive spoken too soon) of shorter time period convergence. This is the BTC/USD bounce off the violent swing low earlier this weekend:
Note that this is a convergence between the natural square 36 (on 30-min timeframe, top) and the natural square 1024 (on 1-min timeframe, bottom) that should point towards the same exact spot in time that denotes the top before the next move down.
Note that this is a convergence between the natural square 36 (on 30-min timeframe, top) and the natural square 1024 (on 1-min timeframe, bottom) that should point towards the same exact spot in time that denotes the top before the next move down.
Comentarios:
The way I trade this is to take 3 unit short here and place a buy stop + 1 long unit above 50k.
Operación activa:
Last update: This might be a scenario where a major turn takes additional time and price action to complete higher-order/degree patterns that are better seen on the daily/weekly timeframes. However, we can be certain that some X degree Elliott Wave completed exactly at the minute chart depicted above.
So, if it does turn out to be one of the rare cases that extends time-wise, then we can best predict it to complete as follows:
At this point, we can still say that the last convergence chart satisfies the end of the pattern, so unless we see a quick, violent move above 50k that almost immediately reverse down for the next major bearish leg, the last post still marks the actual end of the prior pattern.
As such, and to be safe, its best to get rid of the buy-stop altogether or move it above 51k and also the one unit limit buy long above 51.5k to be absolutely in this high prob short setup (and not get caught in the whipsaw reversal, should it come to pass).
10/10 trade setup as far as I see, so hope everyone can catch it nearly-perfectly.
So, if it does turn out to be one of the rare cases that extends time-wise, then we can best predict it to complete as follows:
At this point, we can still say that the last convergence chart satisfies the end of the pattern, so unless we see a quick, violent move above 50k that almost immediately reverse down for the next major bearish leg, the last post still marks the actual end of the prior pattern.
As such, and to be safe, its best to get rid of the buy-stop altogether or move it above 51k and also the one unit limit buy long above 51.5k to be absolutely in this high prob short setup (and not get caught in the whipsaw reversal, should it come to pass).
10/10 trade setup as far as I see, so hope everyone can catch it nearly-perfectly.
