Nothing beats original investigation.

“Ninety-nine percent of the people in the business are followers. They’re not creative and they’re not willing to rely upon themselves to make decisions, so they rely upon other people.”

–Tom Demark

The Study

Covered approximately 6000 years of raw price data from the Philippine stock market

• 600 stock charts
• Approximately 240 listed companies
• 10 years of monthly price data
• 10 years of weekly price data
• 10 years of daily price data

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The Objective:

I sought the answer to 1 question:  What common denominators are to be found in market conditions prior to, or at the inception of, long-term trends in price? (We assumed a long-term trend to be a sustained price increase lasting at least 12 months)

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“Certain price patterns are non-random.”

–James Simons, Renaissance Technologies Corporation

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Ultimately what we found was a distinct recurring price movement preceding all long-term trends in the study. Since nearly 70% of the ensuing trends ranged from 18 months to 5 years, we came to think of this as a high probability indication of a long-term trend. These findings are encapsulated in what we now call the Big Wave Indicator.

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See

Riding Giants at Very Low Risk, Chapter 1:  Big Wave Coming

When Failure Is Not an Option:  The Stewardship of Your Financial Future

E. M. Murray. Customized Portfolios. Professional Management. Fixed Downside Risk.