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2004issue C011-4

Testing a locked forty-week cycle with a hold-or-sit-out rule

A 40-week dominant-cycle can be evaluated as a locked calendar-clock: freeze the interval first, then judge the claim only by whether the two halves produce different results under one hold-or-sit-out procedure.

  • Lock a 40-week calendar-clock before looking at prices, then treat that clock as the dominant-cycle claim under test.
  • A phase-split scores the hypothesized stronger first 20 weeks against the weaker last 20 weeks on the same index series.
  • A mechanical-trading-system turns the clock into one hold, exit, and sit-out procedure that can be scored as a single test.
  • The author presents the phase-split as a historical tendency test, not as proof that cycles exist or that the pattern must continue.
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Current trackDominant cycle detection119 readingsMechanical trading system158 readings

Lock the clock first

The study locks a 40-week dominant-cycle to a calendar-clock that begins on 15 May 1970 and restarts every 280 calendar days. The rhythm is set by that start date and a fixed number of calendar days, not by peaks and troughs in price.

Once the clock is frozen, each interval can be split and scored on the same index series. The dominant-cycle claim is then judged after the sampling interval has already been fixed.

Score the two halves

Each clock is split by a phase-split. The first 20 weeks are the hypothesized stronger half and the last 20 weeks are the hypothesized weaker half, so both halves can be scored on the same index series.

The phase-spread is the difference between first-half and second-half index change inside the same cycle.

What the completed-cycle-sample showed

As of 2 May 2003 the completed-cycle-sample contains 43 such cycles. In that sample the first half posted a gain in 33 of 43 cycles and the second half posted a gain in 23 of 43 cycles.

Average first-half index change was +6.83 percent, versus +0.20 percent in the second half. The first half beat the second half of the same cycle in 28 of 43 cases.

S&P 500: $1,000 held only in each 20-week half of the locked 40-week clock

Under a clock locked on 15 May 1970, holding the S&P 500 only through each first 20-week half grew $1,000 to $14,215 by 2 May 2003, while the same stake held only through each second half fell to $851. The path is columns J and K of the article’s 43 completed-cycle rows, not a tracing of the printed plots.
Under a clock locked on 15 May 1970, holding the S&P 500 only through each first 20-week half grew $1,000 to $14,215 by 2 May 2003, while the same stake held only through each second half fell to $851. The path is columns J and K of the article’s 43 completed-cycle rows, not a tracing of the printed plots.S&P 500 · 40-week cycle (20-week halves) · 1970-05-15T00:00:00.000Z to 2003-05-02T00:00:00.000Z

Interval fixed at 280 calendar days from 15 May 1970 before prices were scored. The open cycle that began 2 May 2003 is omitted. Neither series earns interest while sitting out.

Turn the clock into one procedure

The mechanical-trading-system buys the index at the close on each cycle start, holds for 140 calendar days, then earns a stated idle rate until the next cycle start. Hold, exit, and sit-out actions are specified together, so the procedure can be scored as one test.

From 1970 through 2002 that rule finished ahead of the index in 17 of 33 calendar years, so the evaluation does not show a year-by-year win streak. In all nine calendar years when the index itself declined, the same rule finished ahead of buy-and-hold.

A tendency test, not a proof

The author presents the phase-split as a historical tendency test, not as proof that cycles exist or that the pattern must continue.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
16 of 31 in the Dominant cycle detection track
20051-4 pp.Next on Dominant cycle detectionNested timing bands for dominant-cycle confirmationThe case stacks three nested stock-market rhythms: an annual length of about 12 months, a next-smaller length averaging about 22 weeks, and a trading length of about 40 days.
All readings on this track · 31 readings
  1. 1982Cycle phase windows for chart signal filters
  2. 1987Constructing a cycle-scaled trend oscillator
  3. 1987Constructing a dominant-cycle grid from marked lows
  4. 1988Cycle lead from staggered exponential averages
  5. 1988Auditing the forty-month stock-price cycle
  6. 1989When long-wave dominant cycles cannot be disproved
  7. 1991Half-cycle average plot shift versus cycle attenuation
  8. 1991Half-cycle average contact as an amplitude-ratio test
  9. 1993Building a restoring-pull indicator from cycle frequency and volume
  10. 1995Regime filters for a dominant long wave
  11. 1995A cycle-tuned lead filter from bounded oscillators
  12. 1998Testable cycle rules instead of fear and greed
  13. 1999Nested Euro cycle timing as one checkable procedure
  14. 2002Constructing an instantaneous trendline from a dominant cycle
  15. 2002Half-cycle center of gravity oscillator from moving-average balance
  16. 2004Testing a locked forty-week cycle with a hold-or-sit-out rule
  17. 2005Nested timing bands for dominant-cycle confirmation
  18. 2005Dominant-cycle baselines versus policy-news narratives
  19. 2006Pairing a dominant-cycle horizon with trend and oscillators
  20. 2006A dominant-cycle split into a trend filter and residual Relative Strength Index
  21. 2007Construct a momentum difference from the dominant cycle
  22. 2007Naive dominant-cycle rules fail without crowd tests
  23. 2012Constructing a dominant-cycle forecast as a timing window
  24. 2012Open-parameter construction of dominant-cycle baselines
  25. 2013Using a second-term election to check a predeclared dominant-cycle forecast
  26. 2014Constructing a dominant-cycle forecast baseline
  27. 2014Quotient transform as an early-onset trend filter
  28. 2014Construct a trough-to-trough cycle map with the Detrended Price Oscillator
  29. 2015Dominant-cycle alignment before an earnings catalyst
  30. 2017Causal reverse exponential average for cycle and trend
  31. 2020Constructing a cycle-plus-trend oscillator from a one-wavelength chord
By fieldCycles and spectral analysis77 readingsBy year2004107 readings
All 119 readings tagged Dominant cycle detection
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