What does the principle of Cyclicality state about markets?

The principle of Cyclicality posits that markets are largely composed of cycles, reflecting the natural oscillations that occur due to various influences, such as economic conditions, seasonal factors, and investor behavior. This understanding is crucial for market technicians, as recognizing these cycles can help identify potential turning points and assess the overall market environment.

Markets often move in repeating patterns, exhibiting phases of growth and decline, which can be observed across different asset classes. This cyclic behavior allows analysts to interpret price movements, make predictions, and develop trading strategies based on the anticipated future movements derived from historical patterns. By acknowledging the cyclical nature of markets, technicians can leverage the insights gained from previous cycles to enhance their decision-making processes.