TheCycleCode
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The Stunning Price Cycle Calling The S&P 500 Tops & Bottoms On The Hourly Chart
The 1.793% cycle of price has an extreme resonance with the tops and bottoms of the S&P 500 on the hourly chart when constructed as oscillating vectors in counts of five and nine. The 1.793% price cycle has consistently called, or has been extremely close to (within 94% of), 22 of the last 30 major price tops and bottoms in 16 cycles over the last three years (2010-2012).
The construction of these price cycles is straightforward and mathematical: every time price changes trend and moves 1.793% of price or more, a vector is created. When vectors are drawn and followed, a 5/9 pattern emerges. Vectors will construct an oscillating trend in one major direction even while zigzagging with smaller vectors moving against the vector’s major directional trend, until that trend consistently ends on the 5th or 9th vector in the S&P 500 on the hourly chart.
-S&P 500 from August 4th through November 5th, 2010 – hourly chart.
When a sufficient number of vectors are drawn, a 5/9 pattern emerges in the S&P 500 on the hourly chart. These vectors trend in a vector count of either 5 or 9 before reversing trend and establishing a new vector count of either 5 or 9 in the opposite direction (or a sideways direction in a strong trending market).
The pattern never ends. The 1.793% price cycle of the S&P 500 on the hourly chart has reversed trend after 5 or 9 vector counts since 1983, the first year I can obtain hourly S&P 500 to back test with historical data.
After following this pattern on the S&P 500 on the hourly chart with decades of hourly data, I can report that this 1.793% price cycle is astonishingly consistent and hugely profitable, especially when traded with spider (SPY) options.
-2010-2012 S&P 500 hourly chart with 1.793% cycle vectors.
Every consecutive pair of vectors (making a minor top and a minor bottom) within a vector trend may not best the previous vector pair’s price. For example, the extreme price peak of an entire vector trend may not always be on the last 5th or 9th vector of that trend, but most often it is on the 5th or 9th vector, or very close to the price extreme for that vector trend. The 5/9 vector pattern on of the 1.793% price cycle on the S&P 500 hourly chart is beyond statistically significant, it’s unmistakable.
For example, over the course of 15 consecutive cycles between 2010 through 2012, the top and bottom price extreme has been made on the 5th or 9th vector 14 of all 30 major tops and bottoms. Another 8 cycle tops and bottoms, although not the exact top, where within 94% of the cycle extreme top and bottom. And even some of the remaining cycles with eccentric vector trends that were not at or very near the top would have still been exorbitantly profitable trades. Many of these vector trends are high single or low double digit percentage gains in the S&P 500. That would translate into several hundred percent returns in the spider (SPY) options market.
For instance, the last vector trend of 2012 which began November 16 was in excess of 10% in the S&P 500. The March 2012 SPY 148 call was bought for .94¢ when the first vector of the major trend was formed at market open on November 19, 2012. That option reached a high of $5.64 at the close of February 19, 2013.
However, the S&P 500 cycle trend was forecast to reach $1,5008.59 by the close of market on February 7, 2013. The forecasted price was actually reached on January 29th at 3:32 pm, whereupon the SPY 148 call was exited at $4.23. While the S&P 500 would have returned 10.3% on this cycle trend trade, the SPY option returned a staggering 450% return.
-Spider (SPY) 148 call option prices at entry (11/19/12) and exit (1/29/13)
This last cycle trend trade was not by any means the largest tradable cycle trend of the 2010-2012 back test. Many other cycle trends exceeded 10% on the S&P 500, and many more were mid-single digit S&P 500 returns, still translating to three figure spider option returns.
In my webinar, I analyze 16 consecutive cycles from 2010-2012 in detail, and how I forecast and trade spider options (SPY) based on the 1.793% cycle on the S&P 500 hourly chart.
The 1.793% cycle of price has an extreme resonance with the tops and bottoms of the S&P 500 on the hourly chart when constructed as oscillating vectors in counts of five and nine. The 1.793% price cycle has consistently called, or has been extremely close to (within 94% of), 22 of the last 30 major price tops and bottoms in 16 cycles over the last three years (2010-2012).
The construction of these price cycles is straightforward and mathematical: every time price changes trend and moves 1.793% of price or more, a vector is created. When vectors are drawn and followed, a 5/9 pattern emerges. Vectors will construct an oscillating trend in one major direction even while zigzagging with smaller vectors moving against the vector’s major directional trend, until that trend consistently ends on the 5th or 9th vector in the S&P 500 on the hourly chart.
-S&P 500 from August 4th through November 5th, 2010 – hourly chart.
When a sufficient number of vectors are drawn, a 5/9 pattern emerges in the S&P 500 on the hourly chart. These vectors trend in a vector count of either 5 or 9 before reversing trend and establishing a new vector count of either 5 or 9 in the opposite direction (or a sideways direction in a strong trending market).
The pattern never ends. The 1.793% price cycle of the S&P 500 on the hourly chart has reversed trend after 5 or 9 vector counts since 1983, the first year I can obtain hourly S&P 500 to back test with historical data.
After following this pattern on the S&P 500 on the hourly chart with decades of hourly data, I can report that this 1.793% price cycle is astonishingly consistent and hugely profitable, especially when traded with spider (SPY) options.
-2010-2012 S&P 500 hourly chart with 1.793% cycle vectors.
Every consecutive pair of vectors (making a minor top and a minor bottom) within a vector trend may not best the previous vector pair’s price. For example, the extreme price peak of an entire vector trend may not always be on the last 5th or 9th vector of that trend, but most often it is on the 5th or 9th vector, or very close to the price extreme for that vector trend. The 5/9 vector pattern on of the 1.793% price cycle on the S&P 500 hourly chart is beyond statistically significant, it’s unmistakable.
For example, over the course of 15 consecutive cycles between 2010 through 2012, the top and bottom price extreme has been made on the 5th or 9th vector 14 of all 30 major tops and bottoms. Another 8 cycle tops and bottoms, although not the exact top, where within 94% of the cycle extreme top and bottom. And even some of the remaining cycles with eccentric vector trends that were not at or very near the top would have still been exorbitantly profitable trades. Many of these vector trends are high single or low double digit percentage gains in the S&P 500. That would translate into several hundred percent returns in the spider (SPY) options market.
For instance, the last vector trend of 2012 which began November 16 was in excess of 10% in the S&P 500. The March 2012 SPY 148 call was bought for .94¢ when the first vector of the major trend was formed at market open on November 19, 2012. That option reached a high of $5.64 at the close of February 19, 2013.
However, the S&P 500 cycle trend was forecast to reach $1,5008.59 by the close of market on February 7, 2013. The forecasted price was actually reached on January 29th at 3:32 pm, whereupon the SPY 148 call was exited at $4.23. While the S&P 500 would have returned 10.3% on this cycle trend trade, the SPY option returned a staggering 450% return.
-Spider (SPY) 148 call option prices at entry (11/19/12) and exit (1/29/13)
This last cycle trend trade was not by any means the largest tradable cycle trend of the 2010-2012 back test. Many other cycle trends exceeded 10% on the S&P 500, and many more were mid-single digit S&P 500 returns, still translating to three figure spider option returns.
In my webinar, I analyze 16 consecutive cycles from 2010-2012 in detail, and how I forecast and trade spider options (SPY) based on the 1.793% cycle on the S&P 500 hourly chart.
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