Topic Progress:

If you look back at the charts we’ve displayed relating to cycles, you’ll note that they appear highly symmetrical. What’s true on paper, however, is seldom true in the real world. If you assume that, just because you’ve established the existence of a cycle you can easily extrapolate it, problems quickly emerge that throw water on your efforts.

The first is the fact that market swings are usually “translated.” This term refers to the phenomenon that in any given trend, the swings that move in the direction of the prevailing trend tend to be extended, and the counter trend swings tend to be shortened.

If the market is trending upwards, such that the upswings tend to last longer, and the downswings tend to be shortened, the convention is to refer to this as the cycle having a “right hand translation.” If the opposite is true, the convention is to refer to this as the cycle having a “left hand translation.”

See the chart below for a graphical representation of what we’re talking about here: