When we get close to a target price, we may be close to exiting our trade. Another interesting and profitable way cycles can be used is by analyzing when a cycle top or bottom is due. When 3 or 4 cycle bottoms will coincide in the future, traders can be highly confident that prices are to bottom out. Individual stocks are also analyzed. This ranking essentially tells us where a particular issue is in its cycle shown roughly as follows.
Markets go up and down in cycles which have a wave-like motion.
We believe we can measure where we are on the cycle in the general market and specific stocks. We measure the up part of the cycle B1, B2, B3, B4 and B5, beginning at the bottom with B1. We measure the down part of the cycle S1, S2, S3, S4 and S5, beginning at the top with S1. The objective is to buy at B1 and sell at S1. The rank of each stock is printed in each issue of the Goldstock Letter.