Cycle-Trends Case Study: General Motors Introduction Analysis of this chart indicates a buy signal on October 2, 2001. The price graph figure below is divided into four boxes: Box 1 The graph in the top box is the price defaulted to a line of daily closing prices. Underlying this graph is a smooth green line. This is the Fourier line, around which the cycles are filtered and calculated. Box 2 Contains a line graph of the trigonometric cycles. The line is a combination of the 22 cycles (on average) that have best fitted the peaks, lows and trends of past data. It then moves into the future zone with the forecast. Box 3 This box contains the overbought/oversold indicator derived from cycle analysis, named TrueOBOS. If the indicator is below the green lines an oversold state has been reached and if above the red lines the stock is overbought. Action can be taken if the indicator is confirming the cycle lows or peaks seen in Box 2. Box 4 This box contains the Trendic indicator, derived from the incline (slope) of the Fourier trend, seen as the green line in Box 1. The direction of the Trendic line must confirm the direction of the cycles e.g. if the cycles have bottomed and are trending upwards, the Trendic line must do the same. It triggers a positive signal when moving upwards and crosses the 0 (zero) line and a negative signal if it crosses the zero line in a downward move. In broad and general terms, these three cycle indicators should confirm turning points in the time series, to confirm a cycle bottom, low or trend change. If the historic time series behaves in an ordered way i.e. not overtly large "spikes" and steps (stocks that crash, or long flats (stocks that move sideways for a long time) the Cycle Trends method can claim in excess of 75% success. Analysis Box 1 - Line Graph Line graph showing fall of GM from $65.99 on July 17, 2001 to $42.95 on October 2, 2001. Box 2 - Cycle Graph 22 cycles have been consolidated together and forecasted into the future. The cycle fits the pattern of the price graph. This is important in deciding whether a cycle is valid. Note the cycle low and its s