Investing for Profit with Torque Analysis of Stock Market Cycles
$44.16
| Author(s) | |
|---|---|
| Pages |
243 |
| Format |
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| Published Date |
1973 |
With the cyclical analysis principles illustrated in Investing for Profit With Torque Analysis of Market, there are now two methods of arriving at the answer, each of which supplements the other, which is reasonable because stock prices consist of not one but two parts: earnings (intrinsic) value and cyclical (market) worth.
Introduction:
By fundamental analysis, we can determine the earnings-value portion-or the relatively stable intrinsic value in a stock’s price, expressed as a normal price earnings ratio-and, from a projection of probable future earnings, the trend which future values are likely to follow. By cyclical analysis, we can determine the cyclical-worth portion-or the highly variable high and low market prices likely to be paid as a premium for, or as a discount from, those fundamental values at future points in time. As a bonus, because of the proclivity of cycles to trough at about equal time intervals, cyclical analysis can also indicate when the alternating high and low market price levels are likely to be reached.
Cyclical analysis is concerned with measurement and assessment of the rhythmic fluctuations of market price above and below intrinsic values. lt is based, first, on the determination of the TORQUE FACTOR-or the value of the force which cycles exert to push prices above fundamental values in an upward swing and pull prices below fundamental values in a downward swing of the cyclical rhythm-and, second, on the projection of cyclical rhythms into the future.
When we combine the two methods, we are able to assess future probabilities for price movement from ( 1) the trendular direction of intrinsic values, as indicated by fundamental or economic analysis, and ( 2) the cyclical direction of present and future price rhythms, as indicated by TORQUE ANALYSIS of the price cycles. This book, then, has twin purposes:
- ( 1) To show you that cycles are real forces in the stock market and exert real and observable force in the movement of stock prices
- ( 2) To show you how to make your own appraisal of the probable timing and extent of future price swings
With this knowledge your profit performance should improve-if you can accept the idea that, with cycles, a trough is a prelude to an ensuing peak and not an indication of even lower prices, and that a peak is not an indication of even higher prices but of lower prices to come.
Contents:
- THE PRICE CYCLES IN THE MARKET
- THE FORCES AND FRAMEWORK OF THE CYCLICAL STRUCTURE
- HOW VOLUME POWERS THE CYCLE MECHANISM
- TORQUE ANALYSIS OF STOCK MARKET CYCLES
- THE ART OF FORECASTING WITH MARKET CYCLES
- HOW TO PROFIT FROM STOCK MARKET CYCLES
Investing for Profit with Torque Analysis of Stock Market Cycles By William C. Garrett PDF
3 reviews for Investing for Profit with Torque Analysis of Stock Market Cycles
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Vihaan Kirk (verified owner) –
Certainly worth perusing for Ideas. The author presents many very novel ideas and concepts – again, even reading between the lines hard to follow completely.
Ellis James (verified owner) –
This book is for researcher technical analyst than a trading strategy, as the method used is a bit out dated but the way the author explained the market movements can be of benefit, I have read this book because I was told it will help me better understand market movements, it did the author spend a lot of time trying to explain how he used cycle analysis to predict market movements, yet the way he explained it is a bit out dated, using total averages and A/D to predict market movement and cycles seems very easy but in practice is difficult and also not successful. this method have been long used by cycle analyst to predict market movements, the author did not explain in depth how did he came up with his cycle model and it seems like he measured it by simply looking at a chart which is no easy work, he criticized JIM Hurst communality theory by saying it’s very hard to work with and has too many uncertainties again I find this not true specially for an experience market guy, some stocks do have a common cycle movements elliottwave help in understanding this point by linking market waves. All said I have to say the part where he talks about market tops and bottoms and the cyclical movements of price are very in depth and good work but the way he measured his cycles it defiantly out dated.
Jaxson Proctor (verified owner) –
This book by Will Garrett does not deal with planetary cycles or cycle studies based on planetary movements. It sure discusses Fibonacci ratios and its application in cycle studies though.
It emphasizes the role of volume in cycle studies. In the Torque analysis of stock market cycles, it uses the following equation:
Torque = Force * Radius
Here torque represents price, volume for force and cycle for radius. In his schema of things, “price is a result of the pressures of cycle and volume,…volume is the force which moves price cycles and we also know that cycle and radius are identical. Our equation now reads Price/Volume = Cycle—or, the net movement of price divided by the net amount of volume equals the cyclical strength factor. Since we can easily establish price movement in the market and since we can calculate the net upward or downward pressure of volume, we can then arrive at a factor for cyclical strength. This method of analyzing cycles, we have labelled TORQUE analysis.
“The TORQUE analysis of cycles measures underlying forces, not prices. TORQUE analysis differs from other methods of measuring cycles because the TORQUE method recognizes that price in the market is not genuine unless it is the result of underlying forces. The first of these forces is volume, which is the force principally involved in the movement of price, and second, is the cyclical influence which determines when price will move and how long price will rise before it begins to decline. That is, a cycle in the market is a power which causes price to undulate in rhythmic fashion. It is an inclination toward price movement which arises because the relationship between buying and selling volume alternates at regular intervals of time. In other words, cycles are a rhythmic influence in the movement of stock prices–a power which can be seen and measured–when price and volume are coupled mathematically.”
The foregoing passages sum up his basic idea of looking at cycles using his TORQUE method. He also incorporates advance-decline data and he believes that you can’t fight the swings that are aligned with the long-cycle trends. The image of the next cycle can be anticipated or constructed from the foregoing cycle peak.
His cycle forecasting methodology is based on the following seven assumptions:
1. “Forecasting implies that a change in the present situation lies in the future.
2. The alternation in dominance of the opposing forces is the result of the limiting factors which prevent the complete dominance of one force by its opposite number.
3. Tomorrow’s visible event is the result of a change or movement today of unseen or unheeded forces.
4. Th images of previous events, which we can see gathering form in the incipient stages of a new cycle, allow us to envision the future.
5. Foresight into the future derives from the linked relationship of values moving through time.
6. Cycles adjust quickly to change.
7. The force of a short cycle can alter both the amplitude and frequency of a long cycle.”
He also noted that price cycles have two axes, and, hence follow a parabolic path; the time progression of the trailing axis causes a Fibonacci grid to form. In his view each mature cycle is a closed system of influence.
This book is one of the titles suggested by Jerome Baumring in his reading list.
I highly recommend reading this book to anyone interested in the study of stock market cycles.