A STUDY OF THE CYCLICAL NATURE OF THE SOX GIVING RISE TO A 1-2 MONTH PRICE TARGET

Posted By admin on Nov 25, 2012 | 0 comments

This study will demonstrate the cyclical nature of the SOX, arguably one of the key sub-indexes for the entire market. There is a concept here that I have not shared to date. It is the idea of time compression or expansion across trajectory points.

The best example I can give is during the second half of 2011 during the Euro crisis, the SOX had a compressed cycle of volatility and price movement along the trajectory you will see in the chart below. That compression took place due to the volatile, unpredictable circumstances created by massive macro shocks coming out of Europe. When a market is allowed to function normally, without macro shocks, you get time EXPANSION across the trajectory. This simply means that you get mirrored or correlated price movements along the trajectory in an expanded or normalized state.

Here is a real-time demonstration of price compression and expansion, followed by a projected date and price target to prove the validity of the study:

SOX