MarketTrak Question/Comment Message

Posted By: Rolf   Date: Sat Jun 20, 2009

Title: Cycle Analysis (RE)

  You mention you doubt about the usefulness of the cycle analysis, I do as well as short-term movements are determined heavily be news. Could cycle analysis be used in the intermediate to long-term cycles so it could be a complementary to the short-term?

  I won't know if cycle analysis will be useful until all of the tests are completed and we know the general conditions of the model, like the optimum size of the fitted and forecast regions. Plus, we need to determine the number of sine and cosine functions to be included in the cycle equation and then the best set of equation parameters. This is an enormous problem and the calculations are complicated by the fact that the solution is acquired by iteration.

  My hope is that we will discover a cycle model that gives us a good idea where the market is headed over the next week. This would complement our standard 1-day forecast model.

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