Markets move in cycles. But how long is a cycle? Is this rally two days from ending or two weeks?
Cycle length isn't fixed, but it isn't random either. Each market develops its own rhythm, and that rhythm is measurable.
Here's how to identify cycle length and use it to anticipate turns.
What Determines Cycle Length
Several factors influence how long cycles last:
Timeframe: Higher timeframes have longer cycles. Daily cycles last days to weeks. Hourly cycles last hours. The timeframe you trade sets the general range.
Market character: Different instruments have different cycle personalities. High-beta stocks cycle faster. Forex pairs often have longer, smoother cycles. Crypto cycles can be extremely compressed or extended.
Volatility regime: High volatility typically shortens cycles. When VIX spikes, expect faster, more violent cycles. Low volatility extends cycles.
Market phase: Bull markets often have longer markup phases and shorter declines. Bear markets often have longer declines and shorter rallies.
Measuring Your Market's Rhythm
Here's how to measure cycle length for any market:
Step 1: Identify clear cycle lows. Look for obvious troughs - places where price reached a low and then reversed upward. Mark these on your chart.
Step 2: Count the bars between lows. Measure from trough to trough. This is your cycle length.
Step 3: Calculate the average. Measure at least 5-10 recent cycles. Some will be longer, some shorter. The average gives you the typical cycle length.
Step 4: Note the range. What was the shortest cycle? The longest? This range tells you the normal variation to expect.
Example: If you measure 7 daily cycles and get 12, 15, 11, 18, 14, 13, 16 days, your average is about 14 days and your range is 11-18 days.
Using Cycle Length
Once you know the average cycle length, you can anticipate turns:
Early in the cycle: If you're only 5 days into a 14-day average cycle, the market probably has room to run. Be patient with positions.
Mid-cycle: Around 7-10 days in, start watching for signs of exhaustion. The move could continue, but vigilance increases.
Late in the cycle: At 12-14 days in, you're in the window where turns are likely. Tighten stops, take partial profits, or prepare to trade the reversal.
Extended cycle: Beyond 16-18 days (in our example), the cycle is getting stretched. Either a big move is underway that will continue, or a turn is imminent.
The Time/Price Confluence
Cycle analysis becomes powerful when combined with price analysis:
Time window + price level = high probability turn zone
If your cycle is due to turn (based on average length) AND price is at a significant support/resistance level, the probability of a turn increases substantially.
Conversely, if you're early in a cycle and price hits resistance, the resistance is more likely to break than hold - there's still cycle energy available.
Translation and Inversion
J.M. Hurst's cycle research identified key concepts that still apply today. Cycles don't always peak exactly in the middle:
Right translation: The cycle peak occurs in the latter half of the cycle. This is bullish - more time is spent going up than going down. Common in uptrends.
Left translation: The cycle peak occurs in the early half of the cycle. This is bearish - more time is spent going down than going up. Common in downtrends.
Inversion: Sometimes a cycle that "should" be a low turns into a high, or vice versa. Inversions signal trend changes - the dominant force has shifted.
Tracking translation helps you understand not just when cycles might turn, but how strong the underlying trend is.
Nested Cycles
Markets have cycles within cycles within cycles:
- A weekly chart might show a 6-week cycle
- Within that, daily chart shows 10-14 day cycles
- Within that, hourly chart shows 2-3 day cycles
The key insight: cycle lows on multiple timeframes aligning creates powerful turning points. When your daily cycle low coincides with your weekly cycle low, the subsequent rally tends to be stronger.
Similarly, trading against a higher timeframe cycle is dangerous. Your daily cycle might be bullish, but if the weekly is turning down, the daily rally probably fails.
Dynamic Adjustment
Cycle length isn't static. Monitor and adjust:
Recent cycles matter most. A cycle that averaged 14 days for years might now be averaging 10 days. Use recent data, not ancient history.
Volatility shifts change cycles. When volatility increases, expect cycles to shorten. When it decreases, expect cycles to lengthen.
Trend changes affect translation. As the market shifts from bullish to bearish (or vice versa), watch for translation changes that signal the shift.
Practical Tips
Avoid being too precise. Cycles aren't clockwork. The market doesn't know that "today is day 14." Use cycle timing as a probability guide, not an exact prediction.
Combine with other tools. Cycle timing tells you when to look for turns. Price analysis tells you where to look. Indicators can confirm that a turn is actually happening.
Respect failures. Sometimes cycles extend way beyond normal. When this happens, something unusual is going on - either a powerful trend or an accumulation/distribution pattern extending the phase.
The Bottom Line
Cycle length is measurable. Count trough to trough over recent history, calculate the average and range, and you know roughly how long cycles last in your market.
Use this to set expectations: early in cycles, expect continuation. Late in cycles, expect turns. When cycle timing aligns with price levels, probability increases.
It's not prediction - it's probability. And in trading, probability is edge.
Automated cycle detection systems can handle the measurement and tracking for you. Rather than manually counting bars between troughs, cycle indicators identify phases in real-time and adapt to each market's rhythm. When combined with volume regime detection and confluence scoring, you get confirmation that the cycle turn you're anticipating has supporting evidence from multiple angles.
Pentarch tracks cycle phase in real-time, automatically adapting to each market's rhythm - so you don't have to manually count bars and calculate averages.
See the cycle →