Definition of Price Patterns | Toby Crabel

Toby Crabel wrote a book called 'Day Trading With Short Term Price Patterns and Opening Range Breakout' which is no longer in print and sometimes sold on eBay for more than $1,000. In this book he defines a number of trading patterns which have become popular numbers to calculate and watch among day traders and swing traders. He is a United States self-made billionaire commodities trader. The Financial Times called him "the most well-known trader on the counter-trend side." He is the fund manager of 'Crabel Capital Management', ranking number 101 out of 196 funds on Absolute Return magazine list Absolute Return survey of U.S. groups with more than $1 billion AUM, July 2005. This is the latest current ranking of the top 196 money managers in the US. Toby Crabel manages 3.2 billion dollars and had a growth of 16.7% in 2005. A producer of consistent returns whatever the weather, Crabel had avoided having a losing year from 1991 to 2002. The following are definitions of some of Crabel's concepts, patterns and setups.

Stretch

The Stretch is calculated by taking the 10 day Simple Moving Average (SMA) of the absolute difference between the Open and either the High or Low, whichever difference is smaller.
 

For example, if the Open is 1250, the High is 1258, and the Low is 1240, then we would take the value of 8 for that day because 1258-1250 is 8 which is smaller than 1250-1240 which is 10. We then add together all of these values for the last 10 trading days and divide this by 10 to get the 10 day SMA. This value will then become the Stretch. Stretch Calculation:

1.  Take the Open, High and Low of each day.
2.  Find delta of High - Open.
3.  Find delta of Open - Low.
4.  Which ever is lower between step 1 and step 2 take that value for each day.
5.  Stretch = average of the values of past 10 days.

The Stretch is used in calculating where to enter the trade and where to place a stop using the ORB and ORBP trading strategies. Before buying and selling the Stretch, also consider support and resistance-levels derived from the Daily Classic Pivot Point.

Opening Range Breakout = ORB

Using this strategy, the trader places a buy stop just above the Open price plus the Stretch and a sell stop just below the Open price minus the Stretch. The first stop triggered enters the trader into the trade and the other stop becomes the protective stop.

 

Crabel's research shows that the earlier in the trading session the entry stop is hit the more likely the trade will be profitable at the close. A market movement that kicks off a trend quickly in the current trading session could add significant profit to a trader's position by the close and should be considered for a multi-day trade.

 

The ORB can be utilized as a general indicator of bias every day. Whichever side of the stretch is traded first will indicate bias in that direction for the next two to three hours of the session. This information alone will keep you out of trouble, if nothing else.

 

Multiple contracts can be used when entering on an ORB or ORBP. This allows for some profit taking as the move continues to guarantee at least some profit in the case of a pullback to the break-even stop. A trailing stop is also very effective.
 

If you miss the ORB and early entry occurred, any 3/8 to 1/2 retracement of the established range can be used as an entry point with stops beyond the 5/8 level. This technique can be utilized twice, but becomes treacherous on the third retracement.

Extending Crabel's research results it is obvious that as time passes and we are not filled early on then the risk increases and it becomes prudent to reduce the size of the position during the day. Trades filled towards the end of the day carry the most risk and the later in the day the trade is filled the less likely the trader will want to carry that trade overnight. Variations of this strategy include the Opening Range Breakout Preference (ORBP - HERE).

Opening Range Breakout Preference = ORBP

An ORBP trade is a one sided Opening Range Breakout (ORB) trade. If other technical indicators show a strong trend in one direction then the trader will exercise a "Preference" for the direction in which to trade the ORB trade. A stop to open a position would be placed on the side of the trend only and if filled a protective stop would then be placed. The calculation of where to place the "stop to open" would be the same as that for the ORB trade: For longs, the Open price plus the Stretch and for shorts the Open price minus the Stretch. The ORBP trade is a specialized form of the ORB trade (HERE).  

Narrow Range = NR

If a price bar's Range is less than the previous bar's range it is said to have an NR. The opposite of NR is Wide Spread (WS). NR is technically NR2 when compared to NR4, NR5, and NR7.

Type: Trend-Continuation or Short-Term Breakout Set-up.
Conditions: The current bar has the narrowest range (high - low) of the last X bars. The bar may or may not be an inside bar. Buy and Sell reference are the high and low of the NR bar.

 

Narrow Range 4 = NR4

If a price bar's Range is less than the previous 3 bars' ranges (measured independently) it is said to have the narrowest range in 4 days or NR4. The opposite of NR4 is WS4. NR, NR5, and NR7 are also closely watched price patterns. 

Type: Trend-Continuation or Short-Term Breakout Set-up.

Narrow Range 5 = NR5

If a price bar's Range is less than the previous 4 bars' ranges (measured independently) it is said to have the narrowest range in 5 days or NR5. The opposite of NR5 is WS5. NR, NR4, and NR7 are also closely watched price patterns. 

Type: Trend-Continuation or Short-Term Breakout Set-up

Narrow Range 7 = NR7

If a price bar's Range is less than the previous 6 bars' ranges (measured independently) it is said to have the narrowest range in 7 days or NR7. The opposite of NR7 is WS7. NR, NR4, and NR5 are also closely watched price patterns.

Type: Trend-Continuation or Short-Term Breakout Set-up.

Wide Spread = WS

If a price bar's Range is wider than the previous bar's range it is said to have a WS. The opposite of WS is NR. WS is technically WS2 when compared to WS4, WS5, and WS7.

Wide Spread 4 = WS4

If a price bar's Range is wider than the previous 3 bars' ranges (measured independently) it is said to have the widest range in 4 days or WS4. The opposite of WS4 is NR4. WS, WS5, and WS7 are also closely watched price patterns.

 

Wide Spread 5 = WS5

If a price bar's Range is wider than the previous 4 bars' ranges (measured independently) it is said to have the widest range in 5 days or WS5. The opposite of WS5 is NR5. WS, WS4, and WS7 are also closely watched price patterns.

Wide Spread 7 = WS7

If a price bar's Range is wider than the previous 6 bars' ranges (measured independently) it is said to have the widest range in 7 days or WS7. The opposite of WS7 is NR7. WS, WS4, and WS5 are also closely watched price patterns. 

Inside Day/Bar = ID

If the high of the current day is lower than the high of the previous day AND the low of the current day is higher than the low of the previous day then we have an ID or Inside Day. The opposite to an ID is an Outside Day (OD).  
Type: Trend-Continuation or Short-Term Breakout Set-up.

Outside Day/Bar = OD

If the high of the current day is higher than the high of the previous day AND the low of the current day is lower than the low of the previous day then we have an OD or Outside Day. The opposite to an OD is an Inside Day (ID).

Bear Hook

Bear Hook is a day in which the open is below the previous day's low and the close is above the previous day's close with a narrow range relative to the previous day. As implied by the name there is a tendency for the price action following a Bear Hook to move to the downside. In other words: A Bear Hook occurs when you have an NR with the Open less than the previous bar's Low AND the Close greater than the previous bar's Close.

 

 

Bull Hook

A Bull Hook occurs on Day 2. A Bull Hook is defined as a day with a higher open than the previous day's high followed by a lower close with a narrowing daily range. The next day (Day 1), a trade is taken on the initial move off the open, preferably to the upside.In other words: A Bull Hook occurs when you have an NR with the Open greater than the previous bar's High AND the Close less than the previous bar's Close.

Inside Day/Bar Narrow Range 4 = IDnr4

IDnr4 is an Inside Day (ID) with a Narrow Range 4 (NR4). This is a combination of an ID and an NR4. This happens when the current day's high is lower than the previous day's high AND the current day's low is higher than the previous day's low AND the range is the narrowest when compared to the previous 3 trading days. 

2-Bar Narrow Range = 2BNR

If the 2-day-range (the higher of the 2 highs less the lower of the 2 lows) is the narrowest 2-day-range in the last 20 trading sessions then we are currently sitting on a 2BNR.

 

3-Bar Narrow Range = 3BNR

If the 3-day-range (the higher of the 3 highs less the lower of the 3 lows) is the narrowest 3-day-range in the last 20 trading sessions then this is true.

4-Bar Narrow Range = 4BNR

If the 4-day-range (the higher of the 4 highs less the lower of the 4 lows) is the narrowest 4-day-range in the last 30 trading sessions then this is true.

8-Bar Narrow Range = 8BNR

If the 8-day-range (the higher of the 8 highs less the lower of the 8 lows) is the narrowest 8-day-range in the last 40 trading sessions then this is true.

 

Reference:

Toby Crabel (1990) - Day Trading With Short Term Price Patterns and Opening Range Breakout.

 

See also:

Toby Crabel (1990) - The Principle of Contraction/Expansion.

Possible Pattern of current STD Green Week

The K-Wave: Heretical Thoughts & Practical Understandings | Tony Plummer

 Credits: MARKET TECHNICIAN - Issue 59 – July 2007.

STD Green Week (April 23-27)

 

Tony Caldaro (link): The decline from last weeks Intermediate wave B at SPX 1393 clearly looks like Intermediate wave C. Thus far, we have had a three wave decline to SPX 1370, which we labeled Minor A. Then a rally to SPX 1387, which we labeled Minor B. Minor C is underway now. As soon as the OEW 1363 pivot range, (1356-1370), fails, the steep part of this declining wave should be underway. We continue to look for a correction low between SPX 1300 and 1340, and ideally between 1313 and 1327. Short term support is at the 1363 pivot and SPX 1340, with resistance at the 1372 and 1386 pivots. Short term momentum is nearly back to neutral after getting extremely oversold.

Francis Bussiere (link): Moon in Capricorn Low near Monday the 23rd?
Moon 20 degree High near Wednesday the 25th?  
Moon in Taurus Low near Monday the 30th?
Moon in Leo High near Monday the 6th?

The dual Moon cycles work best from May to October when they are in phase, and historically this is the weakest period in the market.

The Static and the Dynamic Views of Economics | Nikolai Kondratieff

The Sixth Kondratiev Long Wave Cycle

 

The Long Waves in Economic Life | Nikolai Kondratieff

XII. THE NATURE OF LONG WAVES  

Is it possible to maintain that the existence of long cycles in the dynamics of the capitalist economy is proved on the basis of the preceding statements? The relevant data which we were able to quote cover about 140 years. This period comprises two and one-half cycles only. Although the period embraced by the data is sufficient to decide the question of the existence of long waves, it is not enough to enable us to assert beyond doubt the cyclical character of those waves. Nevertheless we believe that the available data are sufficient to declare this cyclical character to be very probable.

We are led to this conclusion not only by the consideration of the factual material, but also because the objections to the assumption of long cyclical waves are very weak.

It has been objected that long waves lack the regularity which business cycles display. But this is wrong. If one defines “regularity” as repetition in regular time-intervals, then long waves possess this characteristic as much as the intermediate ones. A strict periodicity in social and economic phenomena does not exist at all — neither in the long nor in the intermediate waves. The length of the latter fluctuates at least between 7 and 11 years, i.e., 57 per cent. The length of the long cycles fluctuates between 48 and 60 years, i.e., 25 per cent only.

If regularity is understood to be the similarity and simultaneity of the fluctuations of different series, then it is present to the same degree in the long as in the intermediate waves.

If, finally, regularity is understood to consist in the fact that the intermediate waves are an international phenomenon, then the long waves do not differ from the latter in this respect either.

Consequently, there is no less regularity in the long waves than in the intermediate ones, and if we want to designate the latter as cyclical, we are bound not to deny this characterization to the former.

It has been pointed out [by other critics] that the long waves — as distinct from the intermediate ones which come from causes within the capitalistic system — are conditioned by casual, extra-economic circumstances and events, such as (1) changes in technique, (2) wars and revolutions, (3) the assimilation of new countries into the world economy, and (4) fluctuations in gold production.

These considerations are important. But they, too, are not valid. Their weakness lies in the fact that they reverse the causal connections and take the consequence to be the cause, or see an accident where we have really to deal with a law governing the events. In the preceding paragraphs, we have deliberately, though briefly, considered the establishment of some empirical rules for the movement of long waves. These regularities help us now to evaluate correctly the objections just mentioned.

1. Changes in technique have without doubt a very potent influence on the course of capitalistic development. But nobody has proved them to be the cause of long waves. On the contrary, the great importance of technical inventions and of the investment of new capital is most clearly evident during the upswing of the long cycle and during the first years after its highest point. During the downswing, on the other hand, the number of important inventions and new installations put into operation decreases noticeably. This is perfectly natural, for during the downswing the conditions for new investments are relatively unfavourable. Consequently, changes in technique cannot be considered as primary causes of the long waves; they are themselves only a function of their course.

2. Wars and revolutions also influence the course of economic development very strongly. But wars and revolutions do not come out of a clear sky, and they are not caused by arbitrary acts of individual personalities. They originate from real, especially economic, circumstances. The assumption that wars and revolutions acting from the outside cause long waves evokes the question as to why they themselves follow each other with regularity and solely during the upswing of long waves. Much more probable is the assumption that wars originate in the acceleration of the pace and the increased tension of economic life, in the heightened economic struggle for markets and raw materials, and that social shocks happen most easily under the pressure of new economic forces.

Wars and revolutions, therefore, can also be fitted into the rhythm of the long waves and do not prove to be the forces from which these movements originate, but rather to be one of their symptoms. But once they have occurred, they naturally exercise a potent influence on the pace and direction of economic dynamics.

3. As regards the opening-up of new countries for the world economy, it seems to be quite obvious that this cannot be considered an outside factor which will satisfactorily explain the origin of long waves. The United States have been known for a relatively very long time; for some reason or other they begin to be entangled in the world economy on a major scale only from the middle of the nineteenth century. Likewise, the Argentine and Canada, Australia and New Zealand, were discovered long before the end of the nineteenth century, although they begin to be entwined in the world economy to a significant extent only with the coming of the 1890’s. It is perfectly clear historically that, in the capitalistic economic system, new regions are opened for commerce during those periods in which the desire of old countries for new markets and new sources of raw materials becomes more urgent than theretofore. It is equally apparent that the limits of this expansion of the world economy are determined by the degree of this urgency. If this be true, then the opening of new countries does not provoke the upswing of a long wave. On the contrary, a new upswing makes the exploitation of new countries, new markets, and new sources of raw materials necessary and possible, in that it accelerates the pace of capitalistic economic development.

4. There remains the question whether the discovery of new gold mines, the increase in gold production, and a consequent increase in the gold stock can be regarded as a casual, outside factor causing the long waves.

An increase in gold production leads ultimately to a rise in prices and to a quickening in the tempo of economic life. But this does not mean that the changes in gold production are of a casual, outside character and that the waves in prices and in economic life are likewise caused by chance. We consider this to be not only unproved but positively wrong. This contention originates from the belief, first, that the discovery of gold mines and the perfection of the technique of gold production are accidental and, secondly, that every discovery of new gold mines and of technical inventions in the sphere of gold production brings about an increase in the latter. However great may be the creative element in these technical inventions and the significance of chance in these discoveries, yet they are not entirely accidental. Still less accidental — and this is the main point — are the fluctuations in gold production itself. These fluctuations are by no means simply a function of the activity of inventors and of the discoveries of new gold mines. On the contrary, the intensity of inventors’ and explorers’ activity and the application of technical improvement in the sphere of gold production, as well as the resulting increase of the latter, depend upon other, more general causes. The dependence of gold production upon technical inventions and discoveries of new gold mines is only secondary and derived.

Although gold is a generally recognized embodiment of value and, therefore, is generally desired, it is only a commodity. And like every commodity it has a cost of production. But if this be true, then gold production — even in newly discovered mines — can increase significantly only if it becomes more profitable, i.e., if the relation of the value of the gold itself to its cost of production (and this is ultimately the prices of other commodities) becomes more favorable. If this relation is unfavorable, even gold mines the richness of which is by no means yet exhausted may be shut down; if it is favorable, on the other hand, even relatively poor mines will be exploited.

When is the relation of the value of gold to that of other commodities most favorable for gold production? We know that commodity prices reach their lowest level toward the end of a long wave. This means that at this time gold has its highest purchasing power, and gold production becomes most favorable. This can be illustrated by the figures in Table 2.

At the same time, we believe ourselves justified in saying that the long waves, if existent at all, are a very important and essential factor in economic development, a factor the effects of which can be found in all the principal fields of social and economic life.

Even granting the existence of long waves, one is, of course, not justified in believing that economic dynamics consists only in fluctuations around a certain level. The course of economic activity represents beyond doubt a process of development, but this development obviously proceeds not only through intermediate waves but also through long ones. The problem of economic development in toto cannot be discussed here.

In asserting the existence of long waves and in denying that they arise out of random causes, we are also of the opinion that the long waves arise out of causes which are inherent in the essence of the capitalistic economy. This naturally leads to the question as to the nature of these causes. We are fully aware of the difficulty and great importance of this question; but in the preceding sketch we had no intention of laying the foundations for an appropriate theory of long waves.¹Gold production, as can be seen from these figures, becomes more profitable as we approach a low point in the price level and a high point in the purchasing power of gold (1895 and the following years).

It is clear, furthermore, that the stimulus to increased gold production necessarily becomes stronger the further a long wave declines. We, therefore, can suppose theoretically that gold production must in general increase most markedly when the wave falls most sharply, and vice versa.

In reality, however, the connection is not as simple as this but becomes more complicated, mainly just because of the effect of the changes in the technique of gold production and the discovery of new mines. It seems to us, indeed, that even improvements in technique and new gold discoveries obey the same fundamental law as does gold production itself, with more or less regularity in timing. Improvements in the technique of gold production and the discovery of new gold mines actually do bring about a lowering in the cost of production of gold; they influence the relation of these costs to the value of gold, and consequently the extent of gold production. But then it is obvious that exactly at the time when the relation of the value of gold to its cost becomes more unfavorable than theretofore, the need for technical improvements in gold mining and for the discovery of new mines necessarily becomes more urgent and this stimulates research in this field. There is, of course, a time-lag, until this urgent necessity, though already recognized, leads to positive success. In reality, therefore, gold discoveries and technical improvements in gold mining will reach their peak only when the long wave has already passed its peak, i.e., perhaps in the middle of the downswing. The available facts confirm this supposition.¹ In the period after the 1870’s, the following gold discoveries were made: 1881 in Alaska, 1884 in the Transvaal, 1887 in West Australia, 1890 in Colorado, 1894 in Mexico, 1896 in the Klondike. The inventions in the field of gold-mining technique, and especially the most important ones of this period (the inventions for the treatment of ore), were also made during the 1880’s, as is well known.

Gold discoveries and technical improvements, if they occur, will naturally influence gold production. They can have the effect that the increase in gold production takes place somewhat earlier than at the end of the downswing of the long wave. They also can assist the expansion of gold production, once that limit is reached. This is precisely what happens in reality. Especially after the decline in the 1870’s, a persistent, though admittedly slender, increase in gold production begins about the year 1883,² whereas, in spite of the disturbing influences of discoveries and inventions, the upswing really begins only after gold has reached its greatest purchasing power; and the increased production is due not only to the newly discovered gold fields but in a considerable degree also to the old ones. This is illustrated by the figures in Table 3.

From the foregoing one may conclude, it seems to us, that gold production, even though its increase can be a condition for an advance in commodity prices and for a general upswing in economic activity, is yet subordinate to the rhythm of the long waves and consequently cannot be regarded as a causal and random factor that brings about these movements from the outside.

XIII. CONCLUSIONS  

The objections to the regular cyclical character of the long waves, therefore, seem to us to be unconvincing. In view of this circumstance and considering also the positive reasons developed above, we think that, on the basis of the available data, the existence of long waves of cyclical character is very probable.

At the same time, we believe ourselves justified in saying that the long waves, if existent at all, are a very important and essential factor in economic development, a factor the effects of which can be found in all the principal fields of social and economic life.

Even granting the existence of long waves, one is, of course, not justified in believing that economic dynamics consists only in fluctuations around a certain level. The course of economic activity represents beyond doubt a process of development, but this development obviously proceeds not only through intermediate waves but also through long ones. The problem of economic development in toto cannot be discussed here.

In asserting the existence of long waves and in denying that they arise out of random causes, we are also of the opinion that the long waves arise out of causes which are inherent in the essence of the capitalistic economy. This naturally leads to the question as to the nature of these causes. We are fully aware of the difficulty and great importance of this question; but in the preceding sketch we had no intention of laying the foundations for an appropriate theory of long waves.

 

Long Wave Theory - Kondratieff Wave Already Bottomed? | Martin Armstrong

Market & Solar Activity

Yesterday a rapid increase in Sunspots went along with the market's decline.

Geomagnetic forecast suggests weakness also for next Monday, April 23. 

Recent STD Red Weeks

April 16-17 major High - sharp decline into April 20-23 Low - rally into mid May 
(follow upper STD scheme)

The Sun, the Moon, and the Number 56 | David McMinn

A 56-year cycle has been established in trends of US and western European financial crises since 1760 (Funk 1932; McMinn 1996). Clearly, many major financial crises are precipitated by some mechanism, as they tend to occur preferentially in patterns of the 56-year cycle and not as random events. Numerous cosmic factors were examined for some link with the timing of financial crises.

 

Traditional astrology and sunspots were the initial areas favoured for assessment, but no significance could be realized. This is hardly surprising, as rigorous research has offered little support for astrological theory (Dean and Mather 1978; Culver and Ianna 1984). However, the 56-year cycle was found to correlate very closely with cycles of the sun and moon.

The author believes changing mob psychology forms the basis of cycles of financial crises. This repetitive cycle of speculative frenzy, panic, and pessimism has persisted throughout modern economic history; people learn very little from the greed and foolishness of the preceding generation. People are hypothesized to undergo alterations in mass mood in accordance with changing sun-moon cycles. Financial crises occur when there is a sudden shift in sentiment from optimism to fear.

This paper follows directly on from the work of McMinn (1996). The underscored years are listed as major crises by Kindleberger (1989).

Solunar Cycles: The nodal cycle (or nutation cycle) equals 18.6 years. The north and south nodes are two hypothetical points, 180° apart on the ecliptic circle, where the plane of the earth’s orbit around the sun (the ecliptic) is intersected by the plane of the moon’s orbit around the earth. (The moon’s orbit is inclined at 5° to the ecliptic.) The ascending (north) node is the point where the moon crosses from below to above the ecliptic. The descending (south) node is where the moon crosses from above to below the ecliptic. The moon’s north node takes 18.6 years (one nodal cycle) to complete one cycle retrograde (clockwise) through the ecliptic circle.

The solar year equals 365.24 days. This is the time the sun takes to complete one cycle of the ecliptic circle. This time unit forms the basis of the 56-year sequences, the 36-year subcycles (9, 18, 36, 54 years), and the various artifact subcycles (10/20 years, 13/26/52 years, etc.).

The eclipse year equals 346.62 days. This is the time the sun takes to complete one cycle, north node to north node. For an eclipse to take place, the sun-moon-earth must align in a straight line, which can only happen when the sun and moon are near the north and/or south node. A solar eclipse (partial or total) can occur only when a new moon (i.e., the sun is 0° to the moon) is within about 19° of the nodes. Similarly, a lunar eclipse may only be evident when a full moon (i.e., the sun and moon are 180° apart) is within about 12° of these points.

The saros cycle equals 18.03 years. It has been widely appreciated for millennia and was known to the ancient Babylonian astronomer-priests. Every 223 lunar months (one saros cycle), the sun, moon, and the moon’s nodes align in the same relative angles to each other within a fraction of a degree. One saros cycle of 18 solar years is equal to 19 eclipse years.

The half-saros cycle equals 9 years. Every 9 solar years (or 9.5 eclipse years), the moon’s mean relative position is the same angle to the north node, with the sun 180° on the opposite side of the zodiac.

The 56-year cycle. Every 56 years, the sun conjuncts (0° angle) the moon’s north node in almost the same zodiacal position (3° clockwise) and on the same date (minus three or four days). Every 56 solar years (or 59 eclipse years), the sun’s relative position is approximately the same angle to the north node, with the moon 180° on the opposite side of the zodiac.

A similar alignment of solunar cycles occurs every 56 years (692.5 lunar months), as is evident for the half saros (111.5 lunar months) (see Table 1). The 5 in the latter two figures result in alternating solar/lunar eclipses and full/new moons every 111.5 and 692.5 lunar months, respectively.
These cycles—based on the angles 0° and 180° between the sun, moon, and nodes—repeat to within one degree. This is an astonishing astronomical fluke.

 

Solar year: one cycle of the sun from spring equinox to spring equinox; equal to 365.2422 days
Eclipse year: one cycle of the sun from north node to north node; equal to 346.6200 days.
Synodic month: interval between two successive new moons; equals 29.5306 days
Tropical month: one 360° cycle of the zodiac (tropical) by the moon; equal to 27.3216 days.
Nodical month: one cycle of the moon from north node to north node; equal to 27.2122 days.

 

Note: These are average figures. Perturbations exist in the motions of the earth and moon around the sun and deviations from these figures are evident.
 

These 9- and 56-year solunar cycles would not arise if the radii of either the earth-sun or earth-moon orbits varied a little from their current mean distance. The reasons for the importance of 0°/180° angles in these two cycles is unknown, though it may be related to the fact that the north and south nodes are always 180° apart in zodiacal and aspectual circles.

Perturbations. Most importantly, solunar cycles are expressed in terms of mean periods, with considerable fluctuations around the averages. For example, the zodiacal position of the moon may vary by as much as 8° from its mean position.

The Kondratieff Cycle and Its Subdivisions | David Knox Barker

The economic long wave is a boom-and-bust cycle that drives the global economy, first discovered by Russian economist Nikolai Kondratieff in the 1920s. Kondratieff was researching debt, interest rates, production, and prices when he uncovered the economic long wave. The ideal Kondratieff Long Wave Cycle (K-Wave) is 56 years in length, though it can vary, running longer or shorter in Fibonacci ratios relative to the ideal duration (between five 11-year sunspot cycles and three 22-year Hale cycles).

 

 56 year cycle in commodities, bonds, wages, and foreign trade.

 

The current long wave is of the extended variety and began in 1949. Current analysis suggests that this K-Wave will end in 2013, running eight years, or 14.5%, longer than the ideal 56-year duration. 

 

 The Long Wave, the Long Wave Seasons, and 16 Kitchin Cycles.

Harvard economist Joseph A. Schumpeter, author of 'Business Cycles: A Theoretical, Historical, and Statistical Analysis of the Capitalist Process', believed that the economic long wave is the single most important tool for economic prognostication.

  Long Wave (ideal length of 56 years).
Long Wave Seasons (ideal length of 14 years).
Kitchin Cycles (ideal length of 42 months).

Kitchin Third Cycles (ideal length of 14 months)
Wall Cycles (ideal length of 141.9 Day cycle).
Quarter Wall Cycles (ideally 35.475 days).

 

The ideal K-Wave spans 56 years and is divided into four 14-Year Seasons, each consisting of four Kitchin Cycles (approximately 42 months each). Each Kitchin Cycle is further broken down into three Kitchin Thirds (about 14 months each). Within the Kitchin Third Cycle, there are three Wall Cycles (each lasting 20 weeks or 142 calendar days). The Wall Cycle is further subdivided into four Quarter Wall Cycles (approximately 35 calendar days each). These cycles give rise to recurring patterns in financial markets and business trends.

 

The current long wave began in 1949 and is now in the Kondratieff Winter season. Most investors wish they had access to this long wave season chart in 2007. Every long wave has four seasons, just like a year. The approximate length of a long wave season is 14 years, though they can be shorter or longer. Each season typically contains four Kitchin cycles, with an ideal length of 42 months. However, long wave seasons can have fewer or more Kitchin cycles than the usual four.

 

Kitchin Cycles: Joseph Schumpeter concluded that every long wave was made up of 18 smaller business cycles, or Kitchin cycles. In more recent years, with more sophisticated charting technology and market analysis, the research conclusions of market analyst P.Q. Wall—that the long wave is made up of only 16 Kitchin cycles—have been validated. This is an essential distinction in cycle research. 

Schumpeter’s model of how all the cycles worked together to produce long waves included Kitchin cycles (the regular business cycle of 3-5 years) and Juglar cycles (7-11 years), with three Kitchins in each Juglar. Schumpeter also wrote about the Kuznets cycles (15-25 years), but didn’t include them in the charts above. The charts depict the flow of the Kitchin and Juglar cycles integrated into 56-year long wave cycles. Note that Schumpeter’s model presented 18 business cycles in a regular long wave.

 

Market Cycles differ from Business Cycles in that they are identified on an index chart, rather than necessarily in the economic data as a business cycle. However, they often correlate with the regular business or trade cycle. Every long wave appears to be made up of 16 market "Kitchin" cycles. The 16 Kitchin cycles that make up a long wave are ideally 42 months in length, though they are rarely ideal and fluctuate in length, both shorter and longer. In each Kitchin cycle, there are ideally 36 dips or 36 Hurst "5-week" lows.

Kitchin Third: The ideal Kitchin cycle is 42 months, or 1,277.5 days, in length, while the ideal Kitchin Third is 14 months, or 425.83 days. A Kitchin cycle is made up of 9 Wall Cycles, so each Kitchin Third consists of three Wall Cycles. P.Q. Wall had a general rule: the third is often the last and weakest. This applies to the final Kitchin Third in a Kitchin Cycle, as well as to Wall Cycles #3, #6, and #9—the final Wall Cycle in each Kitchin Third. The Kitchin Cycle often unfolds in three Kitchin Third sections, but the Kitchin Third is not typically as distinct as the other cycles.

 

 

Wall Cycle (aka 20-Week Cycle): The Wall cycle is the ideal trader’s cycle. Accurate technical analysis of the Wall cycle is essential for traders. Dividing the ideal 56-year long wave by 144, one obtains the ideal Wall cycle. The mathematical relationship of these cycles indicates that the Wall cycle is a miniature long wave. The approximate 20-week cycle (141.9 days) fluctuates shorter and longer by Fibonacci ratios to the ideal length. 

 

 
Quarter Wall Cycle (aka Trader’s Cycle): As the name implies, the Quarter Wall cycle reflects that the Wall cycle tends to unfold in four sections, or Quarter Wall cycles. The Quarter Wall cycle is a mini version of the long wave season. The ideal Quarter Wall cycle fluctuates in Fibonacci ratios relative to its ideal length of 35.475 days. The Quarter Wall is the critical cycle for traders. Just like the other cycles, the Quarter Wall will run shorter and longer relative to the “ideal”. The forecasting power of the Quarter Wall forecasting tool is often startling.

 

 

"There is a tide in the affairs of men.

Which, taken at the flood, leads on to fortune;

Omitted, all the voyage of their life

Is bound in shallows and in miseries.

On such a full sea are we now afloat,

And we must take the current when it serves,

Or lose our ventures."

  Julius Caesar, Act 4, Scene 3 — William Shakespeare, 1599.

"By the Law of Periodical Repetition, everything which has happened once must happen again,

and again, and again - and not capriciously, but at regular periods, and each thing in its own period,

not another’s, and each obeying its own law [...] The same Nature which delights in periodical 

repetition in the sky is the Nature which orders the affairs of the earth. 

Let us not underrate the value of that hint."
The Mysterious Stranger — Mark Twain, 1898.

 

Reference:

David Knox Barker (2012) - Market Cycle Dynamics.

David Knox Barker (2010) - Fibonacci in Time and Price.

David Knox Barker (2010) - P.Q. Wall Of Waves: Fibonacci In Time And Price. 

Forbes (July 17, 2002) - P.Q. Wall Is Full Of Worry.
P.Q. Wall (July 23, 2001) - Fire or Ice.  

David Knox Barker (1996) - The K-Wave: Profiting from the Cyclical Booms and Busts in the Global Economy.