|  FEB 1991

Predicting The Shape Of A Cycle Bottom by Michael R. Burk

Predicting The Shape Of A Cycle Bottom by Michael R. Burk I define a cycle as what happens between peaks in my New Low Indicator. Since the beginning of 1978 there have been 24 complete cycles averaging a little over 120 trading days, or 24 weeks. Cycle bottoms play out in two distinctive patterns, which I call V and W. Each bottom traces out the pattern of its letter description. A V bottom is one where the price index declines to a bottom and then heads up again (Figure 1). In the W bottom the price index reaches a low, retraces a portion of the decline and then falls back to retest the previous bottom; it can make several retests, at which point it creates a multiple W pattern (Figure 2).

by Michael R. Burk