SD – no that is not what I am saying. What I am saying is that you cannot determine cycles by price alone. Momentum moves that detach themselves from fundamentals can run so much further in price that what we can ever project. I would argue that these price extensions are actually part of the fundamentals. They happen often, Gold at $725 just a bit ago is another example. When this is happening, coupling time cyclical analysis can help us make a better estimate of when the cycle is due to end.
This cycle has ended right on schedule time wise in RE although late in price, and it is how I determined to wait until 2005. Predicting price with price alone is something alot of traders try to do, and why many of them get blown out. I learned this lesson through the school of hard knocks, believe me! The ten year cycle has repeated itself fairly close to on schedule a few times in RE.
The stock market low of 2002 went really far in raw price dollars, but not in time. Combining the two in that case also worked very well. The fundamentals actually are what create the cycles in the first place. Supply and demand are what determine the major price turns. Demand was certainly extended by the financing aspect of all of this. However, my argument is that in my world of KISS (Keep it simple stupid) I did not need to over analyze 100 different variables. I just focused on two and basically got it right.
My question is which is easier, analyzing a wide array of very fluid numbers and trying to come up with an overall bias, or just looking at larger picture cyclical things and not sweating the small stuff? For me I take the latter approach.
My little pea brain loves to go off on tangents and over analyze things, so I have learned to keep it focused. I know this is probably controversial but I do tend to think a little different from the crowd. At times though it does make me the village idiot!
