The Dominant Mid-Cycle Indicator

The mid-cycle indicator measures a 30-40 bar cycle. The chart below shows both the dominant short-cycle and mid-cycle indicators, with the mid-cycle shown in blue. Of note is that, when both indicators are moving in the same direction, the market tends to move strongly in that direction.

If the trend of the market is strongly UP (as it was throughout much of the chart above), then the oscillator will usually turn before price at cycle tops. This is not a 100% rule, but it occurs more often than not. In other words, if the market is in a strong uptrend, then it does not pay to try and short the market just because the indicator is turning down -that it UNLESS a solid divergence is forming between the oscillator and price.

Divergences

It's also good when divergences form between the indicator and price. Below is the same chart as before, only this time key divergences are noted between price and the oscillator. Note that, in nearly each case an immediate reversal occurred in the opposite direction. This makes it key to note: when price is making lower lows or highs, but the oscillator is not confirming - then be on the alert for a price reversal to occur soon.

In my years of looking for indicators that turn quickly after cycle highs and lows I think these have the optimum balance between ‘smoothness’ and the ability to turn quickly. While there is no such thing as the 'holy grail', both the short and mid-cycle indicators will turn as fast as possible with price after cycle bottoms.

 

These indicators are for Tradestation only; you must be able to import an ELS file in order for the indicators to work.

 

Pricing:

You can purchase the Dominant Short and Mid-Cycle indicators below for only $70.00.

Once payment is confirmed (through Pay-Pal) I will email you the file, also the short user manual that accompanies it.

The chart below is a four-month period on the Nasdaq 100 index (NDX). Note that the indicator turns very quickly with the nominal 15-18-day cycle, catching lows just after price turned in most cases. This particular cycle is the most dominant trading cycle for the short-term trader, and thus presents the best opportunity for a potential trade:

The Dominant Short-Cycle Indicator is excellent for tracking a regular occurring cycle of between 10 and 20 bars in length. The indicator works about as well for intraday timeframes as it does for the daily and weekly charts. I like it because it is fairly smooth, but yet also turns quickly after cycle bottoms or tops - about as much as you could ask for in any such indicator.