Fourier Transform is able to separate out recognizable cyclical patterns which are not evident from the composite data stream. The complete analysis concept is called spectral analysis. Extensive research has shown that the correct choice of cycles in the Cycle Trend program can pinpoint major tops and bottoms and the intermediary corrections that occur between bull market peaks and bear market lows. The Cycles Examination of any equity reveals that in its progress over any period, lows and peaks are developed. A cycle is measured from one low point to the next or between peaks and can be of varying lengths.
Smaller cycles can form within the long cycles.
The Cycle Trends program computes the most relevant and dominant cycles from past and current data. Based on this, the cycles are then projected into the future, forecasting when new peaks or lows are likely to take place and what the next trend is likely to be. In a nutshell these cycles have the unique ability to spot changes in trend. The cycles are divided into major and minor cycles depending on their RSQ's. RSQ stands for R-squared and its number tells you how well that cycle had fitted historic data in the past.