Cycle-Trends Cycle Analysis and Indicators What are Cycles? A regular cycle is the regular occurrence of an event at specified times and of a specified size. An example of such a cycle is the rotation of the earth around the sun on a regular 365.25-day basis i.e. at -23.5 degree latitude (the Southern Hemisphere) the sun will always be directly overhead (no shadow) at 12h00 noon on the 21st of December. Another regular cycle is the 24-hour rotation of the earth around its own axis. Mathematimally speaking a regular cycle will have a constant size (amplitude) and the time-interval from low to low and from high to high (period) will always be the same. In between highs and lows, the variation of the size with time is described by a sine or cosine (very smooth) curve. In economic time series, such as the price movement of a share with time, one can hardly hope for such regular cycles. If the cycles were indeed so regular, everybody would have been able to spot them and there would have been no markets for these instruments. Here the movement will be much more erratic i.e. both the amplitude and the period will vary with time. The purpose of a cycles program, such as Cycle Trends, is to find these irregular or erratic cycles in the history of a financial instrument and to project them forward in time with a sufficient measure of certainty to be useable for profitable trading or investment. History of Cycle Analysis Probably the first well-documented use of cycles appeared in the Bible when Joseph, while in jail in Egypt, figured out that the Nile River has a 14-year cycle of floods and droughts. This made him the second most powerful man in the world of his time. When primitive societies started to change from hunting and gathering to agriculture, around 10 millennia ago, the seasons had to be studied to determine the ideal time for planting. Stonehenge probably served as an early attempt at such a venture, but many such sites existed in the ancient world. The next big impetus for cycles came after the Industrial Revolution when it was realised that economic prosperity is not a smooth process but moves in cycles. A General Leonard P Ayres expressed it very well when he said: "Business cycles are as old as the industrial era. Their prosperities have created thousands of fortunes and their depressions have m