Tim Wood is a Certified Public Accountant. He began publishing his market letter, Cycles News & Views, www.cyclesman.com, after writing a cover article in Technical Analysis of Stocks and Commodities Magazine. In that article, he correctly identified the 2000 market top, as well as a subsequent decline that produced the 2002 bottom.
Tim’s background disciplines are accounting and finance. And, he was first exposed to technical analysis during a senior-level college finance course. The course cultivated an interest that motivated him to further study of technical analysis methodology. His investigation of technical methods in the mid-1990’s led Tim to the work of the cycles pioneer, Walter Bressert, who also serves as President of the Foundation for the Study of Cycles. Tim had the honor and privilege of studying extensively under the direct supervision of Mr. Bressert. He was attracted to Mr. Bressert’s methodology by the quantifiable characteristics not found in other technical methods. Tim’s application of these cyclical and statistical based methods allowed him to correctly call the 2000 top and decline into the 2002 low.
During the period from 2000 to 2002, Tim began to study Dow Theory. This lead him to the work of Richard Russell. Mr. Russell helped Tim obtain the original 1930‘s writings by Robert Rhea, the leading Dow theorist of that time. These writings and those of Mr. Rhea’s predecessor, William Peter Hamilton, influenced Tim’s eventual conclusion that there may be a connection between Dow Theory and cycles, despite the absence of an obvious link. Specifically, Tim discovered that the bull and bear market periods in the early days of the market averages were connected to the 4- year cycle. This result was supported by analyses of William Peter Hamilton and Robert Rhea.
Tim was then able to dovetail the two methods, which he uses as complementary tools. So, he is able to apply a quantitative approach to Dow Theory and create a discipline not achievable with Dow Theory alone. Tim combined these methods to create a technical analysis platform that includes his Cycle Turn Indicator as well as a Direction and Swing Summary.
He uses Dow Theory to profile market direction in conjunction with longer-term cycles to estimate the larger-degree trend. Then, he employs data mining techniques to determine probabilities. Probability analysis, in turn, is used in support of intermediate-term and short-term statistical inputs to cycle analysis. A composite of Primary Indicators is used to generate buy and sell signals with Confirmation Indicators intended to add a level of confidence. A set of Secondary Indicators is used to identify overbought and oversold levels that may suggest the formation of cycle tops and bottoms.
The analytical method is, then, a layered approach. Dow Theory, cyclical data, and statistical probabilities are used to provide expectations about longer-term market direction. Intermediate-term, weekly Primary indicators are used to determine the right side of market position. And, when combined with intermediate-term cycle phasing, weekly evidence serves as a guide for persistence or possible change of longer-term market direction. Finally, short-term indicators are used to identify intermediate-term turning points.
Tim relied on these methods to correctly identify and warn his subscribers of the housing top in 2005, the stock market top in 2007, the commodity/crude oil top in 2008, the 2009 low in equities and of the 2011 top in gold. During the 2004 to 2007 period, he maintained that the equity market was stretching into an extended 4-year cycle top. He also contended that the liquidity infusion would only serve to make matters worse in conjunction with the decline into the 4-year cycle low. This proved correct as the most severe financial decline since the 1930’s followed in the wake of that extended 4-year cycle advance. As the rally out of the 2009 low began, Tim said “the longer the rally lasts, the more dangerous it would become.” What started as just another liquidity induced extended 4-year cycle advance out of the 2009 low, had by January 2018 become the most overvalued bubble since the inception of US stock market data going back to 1800. While the creation and extension of the most overvalued bubble in US history has exceeded expectations, it does not change nor negate its reality. Since that overvaluation reading in January 2018 a protracted topping process has been taking form in association with what Tim has identified as the downturn out of the 6th long-term economic cycle since 1800. Based on Tim’s research, the downturn out of this 6th economic cycle is now lined up to correspond with the bursting of the largest economic bubble in history.
Tim also maintains that a major cyclical bottom in gold still lies ahead. Cycles News & Views presents a detailed analysis of the dollar, gold, bonds and other sectors, when appropriate, in its monthly research letters. A subscription also includes web-based updates, which are typically done three times a week.