- Expansionary periods (low rates, money creation) - Followed by contraction/normalisation
Central banks now deliberately manipulate liquidity, interest rates, and asset prices to control economic cycles, using monetary policy as a precision tool rather than a blunt instrument.
Cycle Characteristics (based on historical cycles):
- A cycle has 4 seasons (Spring, Summer, Fall, Winter) - Each season with a cycle lasts 365 days - The Cycle Low happens towards the beginning of the Spring Season of each new cycle - This is followed by a run up throughout the Spring and Summer Season - The Cycle High happens towards the end of the Fall Season - The Winter season is characterised by price corrections until establishing a new floor in the Spring of the next cycle
Key Functionalities
1. Cycle Tracking - Divides market history into 4-year cycles (Spring, Summer, Fall, Winter) - Starts tracking cycles from 2011 (first cycle after the 2007 crisis cycle) - Identifies and marks cycle boundaries
2. Visualization - Colors background based on current cycle season - Draws lines connecting: - Cycle highs and lows - Inter-cycle price movements - Adds labels showing: - Percentage gains/losses between cycles - Number of days between significant points
3. Customization Options - Allows users to customize: - Colors for each season - Line and label colors - Label size - Background opacity
Detailed Mechanism
Cycle Identification - Uses a modulo calculation to determine the current season in the 4-year cycle - Preset boundary years include 2015, 2019, 2023, 2027 - Automatically tracks and marks cycle transitions
Price Analysis - Tracks highest and lowest prices within each cycle - Calculates percentage changes: - Intra-cycle (low to high) - Inter-cycle (previous high to current high/low)
Visualization Techniques - Background color changes based on current cycle season - Dashed and solid lines connect significant price points - Labels provide quantitative insights about price movements
Unique Aspects
1. Predictive Cycle Framework: Provides a structured way to view market movements beyond traditional technical analysis 2. Seasonal Color Coding: Intuitive visual representation of market cycle stages 3. Comprehensive Price Tracking: Captures both intra-cycle and inter-cycle price dynamics 4. Highly Customizable: Users can adjust visual parameters to suit their preferences
Potential Use Cases
- Technical analysis for long-term investors - Identifying market cycle patterns - Understanding historical price movement rhythms - Educational tool for market cycle theory
Limitations/Considerations
- Based on a predefined 4-year cycle model (Liquidity Cycles) - Historic Cycle Structures are not an indication for future performance - May not perfectly represent all market behavior - Requires visual interpretation
This script is particularly interesting for investors who believe in cyclical market theories and want a visual, data-driven representation of market stages.
In true TradingView spirit, the author of this script has published it open-source, so traders can understand and verify it. Cheers to the author! You may use it for free, but reuse of this code in publications is governed by House rules. You can favorite it to use it on a chart.
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