The following represent terms that are oftentimes used in the MMA Cycles Reports, SOS Stock Market Cycles Reports, and MMA's daily and weekly commentaries.
1. Cycle: A measurable phenomenon which occurs consistently at regular intervals of time. In markets, cycles are measured from trough (low) to low.
2. Trough: a low in price.
3. Crest: a high in price.
4. Isolated Low: a price which is lower than the low of the day before and the low of the day after. Every cycle trough is an isolated low. Exception can be if two days have the same low, but both are lower than previous day or following day.
5. Isolated High: a price which is higher than the high of the day before and the high of the day after. Every cycle crest is an isolated crest. Exception can be if two consecutive days have the exact same high, but both days are higher than the previous day or following day.
6. Bull Market: Consecutively higher crests and higher troughs of the same cycle type; 'right translation' patterns of primary cycles.
7. Bear Market: Consecutively lower troughs and lower crests of the same cycle type; 'left translations patterns of primary cycles.
8. Trend: Bull or bear (as above). Trend depends upon the cycle you are studying. The trend is usually determined by the next longest time frame cycle than the one you are studying. For example, the trend of the primary cycle, may depend upon the phasing of the 50-week cycle; the trend of the 50-week cycle may depend upon the phasing of the 4-year cycle.
9. Phase: Relates to what sub-cycle of the larger cycle you are in. For instance, there are three major cycles (sub-cycles) within a primary cycle. These major cycles can also be referred to as the three 'phases' of the primary cycle. Once the first major cycle is completed, the primary cycle begins its second 'phase', or second major cycle within the primary cycle. The 'phase' of a cycle is important.
10. Support: An area below the current market price where we expect prices to hold on declines. A 'floor' for prices.
11. Resistance: An area above the current market price where we expect prices to hold on rallies. A 'ceiling' for prices.
12. 'Close that is bearish:' Occurs when prices close below daily or weekly support.
13. 'Close that is bullish:' Occurs when prices close above daily or weekly resistance.
14. Bullish Trigger: Occurs when prices trade below daily or weekly support, but then close back up above it.
15. Bearish Trigger: Occurs when prices trade above daily or weekly resistance, then close back below it.
16. Trend run up: Occurs when a market has three consecutive closes above a proprietary moving average line. Concept developed by Charles Drummond.
17. Trend run down: Occurs when a market has three consecutive closes below a proprietary moving average line. Concept developed by Charles Drummond
18. Bullish Crossover Zone: Occurs when current day's (or week's) support zone is near to, or above, the previous day's (or week's) resistance zone. The market is bullish until prices close back below this crossover zone.
19. Bearish Crossover Zone: Occurs when current day's (or week's) resistance zone is near to, or below, the previous day's (or week's) support zone. The market is bearish until prices close back above this crossover zone.
20. Lorusso 5-Point Reversal Pattern - Bearish: Named after Smith Barney Chief Technician Rick Lorusso. Occurs when a market exhibits consecutively higher isolated highs, with consecutively lower isolated lows between them. The first point is an isolated high (point 1), which is followed shortly afterwards by an isolated low (point 2). This is followed by a higher isolated high than point 1 (point 3), which is followed by a lower isolated low than point 2 (point 4). This then is followed by an even higher isolated high than point 3 (point 5). After this, a prolonged decline tends to unfold.
21. Lorusso 5-Point Reversal Pattern - Bullish: Occurs when a market exhibits consecutively lower isolated lows, with consecutively higher isolated highs between them. The first point is an isolated low (point 1), which is followed shortly afterwards by an isolated high (point 2). This is followed by a lower isolated low than point 1 (point 3), which is followed by a higher isolated high than point 2 (point 4). This then is followed by an even lower isolated low than point 3 (point 5). After this, a prolonged rally tends to unfold.
22. 'Pat's Combo Down:' Named after technical market analyst Patrick Shaughnessy, student of Charles Drummond. Occurs when the high and low of the day (or week) are both higher than the high and low of the previous day (or week), and 1) prices closer near the low of that day or week, and 2) prices also close below a proprietary moving average. This setup presages a sharp price decline.
23. 'Pat's Combo Up:' Occurs when the high and low of the day (or week) are both lower than the high and low of the previous day (or week), and 1) prices closer near the high of that day or week, and 2) prices also close above a proprietary moving average. This setup presages a sharp rally.
24. 'Double Loop Stochastic:' Occurs when the K and D lines of the stochastics oscillator fall below 20%. The K line then starts to rise above the D line ('crosses over'), then falls back below it again ('loops' below it), and then both start to rise above 25% (K crosses above D again too). This is a strong bullish signal ('bullish double loop'). The opposite can occur above 80%, in which case it can be a strong bearish signal ('bearish double loop'). Concept introduced by Technical Analyst Robert Perry.
25. Bullish Intermarket Divergence: Occurs when a market makes a new cycle low, but is not confirmed by a new cycle low in another closely related market. Examples would be Dow Jones Industrials and S&P futures, or Gold and Silver, or Corn and Soybeans, or Swiss Franc and Euro. If one makes a new low and the other does not, during a cyclic time band for a low, it is a good 'buy' signal.
26. Bearish Intermarket Divergence: Occurs when a market makes a new cycle high, but is not confirmed by a new cycle high in another closely related market.
27. Neutral: Pertains to a trading range that is between daily/weekly support and resistance. In terms of trend indicator, it pertains to a situation in which the market ends a streak of consecutive closes above or below the daily or weekly trend indicator point (proprietary moving average). When it has three consecutive closes above or below this point, it changes form neutral to either up or down trend. Concept developed by Charles Drummond.
28. “Gap Up:” This occurs when a day’s range is above the entire range of the prior day. In other words, the low of the current day is higher than the high of the prior day.
29. “Gap Down:” This occurs when a day’s range is below the entire range of the prior day. In other words, the high of the current day is lower than the low of the prior day.
30. Measuring Gap: A gap that is followed by a big move in the direction of the gap. If a “gap up” is a measuring gap, it is bullish, and prices will continue higher that is approximately the same distance above the gap, as the gap is above the recent primary cycle trough. It will not fill the “gap up” before it reaches the measuring gap target zone. If a “gap down” is a measuring gap, it is bearish. Prices will usually continue down, about the same distance from the gap, as the distance between the gap and the previous primary cycle crest. If prices rise to fill the gap down before reaching the downside price target, it is not a measuring gap. Measuring gaps occur when the market is in the process of a move to a primary cycle crest (measuring gap up) or trough (gap down).
31. Exhaustion Gap: A gap that occurs near the end of a move to the primary cycle crest or trough. The gap is filled before it reaches a measuring gap target. This usually occurs right near the end of the primary cycle, and oftentimes is an “island reversal” pattern.
32. Bullish Island Reversal: A gap down day, followed by a gap up day. This is a very bullish signal, and usually occurs near the end of a primary cycle trough, and beginning of a sharp reversal up.
33. Bearish Island Reversal: A gap up day followed by a gap down day. This is a very bearish signal, and usually occurs near the end of a primary cycle crest, and beginning of a sharp reversal down.
34. Double top: A chart pattern where the markets makes a crest (high in price), then declines, and then a few days (or weeks or months) later, it returns to that same price area to form a second peak, known as a “double top”. If the second top holds, it is usually a bearish sign, that the market will fall for awhile.
35. Double bottom: A chart pattern where the markets makes a trough (low in price), then rallies, and then a few days (or weeks or months) later, it returns to that same price area to form a second trough, known as a “double bottom.” If the second trough holds this area, it is usually a bullish sign, that the market will rise for awhile.
Abbreviations Used For Cycle Types:
PC = Primary Cycles
PB = Primary Cycle bottom (usually 13-21 weeks, lowest price in PC)
PT = Primary Cycle top (highest price between 2 Primary Cycle bottoms, highest price in PC)
1/2-PB = 1/2-Primary Cycle bottom (happens midway in a PC, about 65% of time)
1/2-PT = 1/2-Primary Cycle top (highest price in the half cycle)
MB = Major Cycle bottom (the low when cycle divides by 3; about 4-7 weeks intervals; happens about 80% of time)
MT = Major Cycle top (highest price between 2 MB's)
DB = Double Bottom, usually to a primary cycle bottom, or trough.
DT = Double Top, usually to a primary cycle top, or crest
TB = Trading Cycle bottom, usually about 2-4 week interval; not used much in our analysis
TT = Trading Cycle top, highest price between two TBs; not used often in our analysis.
Many of these cycle periodicities were first introduced by Walter Bressert - particularly the primary and half-primary cycle types.
