MECF Shift

[ForJL]

While it could just be me it seems the board is off to a slow start especially considering the caliber of traders we have here. So I’m going to try and get things rolling with a discussion on forecast shift as it pertains to what I call the Modified Exchange Cycle Forecast. [See old board while it is still up.] While the focus here is the MECF the discussion is also applicable to other such forecasts such as Energy Flow and the Natal Forecast. Depending on the response I would be willing to post all 5 model variations that I have been using successfully now for close to three years. Additionally there are other things that I would be willing to cover on this subject though again it depends on response and on how much others are will to share also. However one thing at a time … first this discussion.


Those of you who have followed my work in Energy Flow know exactly how I feel about forecast shift … I hate it! However I have also been studying them for some time now and more convinced than ever that they are caused by brief, but fairly intense, energy bursts that cause the forecast to essentially vibrate back and forth. These vibrations diminish over time before eventually dissipating all together. The first chart below shows the initial MECF as a line on top before any adjustments are made with each energy wave numbered 1-10. Over the bars we see the same energy waves after it was determined that an energy burst forced the forecast back 8 bars or 128 minutes (16 minute chart.) Harmonic price adjustments have already been made here and not the focus of today’s discussion. However for clarity energy waves 1-7 did not invert and were either base harmonic (light blue) or second order base x 2 (dark blue). Number 8 extended (light green) and number 9 was a simple second order inversion (red). As you can see energy waves 1 and 2 were not a problem. However #3 comes up a bit short and at its conclusion we still can’t be sure if we are experiencing “shift normalization” or simply a slightly off forecast. As we move into energy wave #4 it becomes clearer and clearer that normalization (the process of energy burst dispersion) was underway. Simple observation told me the forecast had now shifted forward 5 bars or 80 minutes. Chart #2 shows how this looks. Energy wave’s #’s 4 and 5 do a very nice job of calling price targets and turns. Wave #6 starts off well enough but we soon run into a problem. Halfway through the energy wave price turns up. Now if we didn’t know how to work with energy shift one might think we simply had a bad forecast. However because I now understand them better I was expecting another shift reversal back in the other direction. I applied the same 5 bars as a starting point [At this point in time I am still working on a shift dispersion rate] and eventually found that 4 bars was what was needed. This can be seen in chart #3. After that everything falls into place nicely. Not perfect, but pretty darn good.
So to recap, I believe market forecast shifts of this type are caused by short, intense energy bursts. They are not nearly strong enough to throw the forecasts off completely but strong enough to make them “wobble” back and forth until their effects eventually erode completely. Knowing how to spot them and deal with them in a correct manor should therefore give the trader working in this area of analysis an edge when they are encountered.
As usual hope some of you found this interesting. Additionally let me know what you guys think about sharing ideas.

Best,

YM_081315_a.png (50.15 KiB) Viewed 6668 times

YM_081315_b.png (50.34 KiB) Viewed 6668 times

[ForJL]

The last chart I posted last night omitted some data. The chart below corrects that error.

YM_081315_d.png (55.09 KiB) Viewed 6657 times

[Simon.B]

Hi Joe,

Thanks for the post, what is "Modified Exchange Cycle Forecast" ? I tried to look it up on the old Forum, but I think it's down already.

[ForJL]

Hi Simon,


Yeah, looks like the old forum is officially toast. The MECF is really nothing more than the Exchange Cycle Forecast using things I learned when I developed EMGP (Electromagnetic Gravitational Pull). Because it uses what I believe to be unique inputs I hung the “modified” moniker on it. However at its core make no mistake, it is Earik’s indicator, not mine. I copied all relevant old posts of mine so when I get a chance I’ll try and dig some of them up for you and post them here for additional information.



I thought I would show another example from today’s trading that exhibited a fairly minor energy burst that in turn produced modest shift within the forecast. The energy waves are again numbered 1-10 as seen in the first chart and just as in the previous example for clarity sake let’s get price harmonics out of the way first. Wave #1 is base harmonic, 2 & 3 are second order base x 2. The 3 & 4 are base, #5 is base x 3, and # 7 is a simple base x 2 inversion. The #8 inverts and is base x 6 while 9 &10 are base. Okay, everything is running fairly smoothly through EW #4 but the #5 over shoots a little. It was quite clear the overshoot was 3 bars. This adjustment can be seen in the second chart. What was interesting here is today, unlike the other day, I was able to identify the location of the energy burst. It is labeled “hypocenter” on the chart for lack of a better term. The first shift occurs 13 bars to the left of the hypocenter. I then used this as a ruler of sorts [I’m attempting to develop more sophisticated tools than rulers] to help gauge where the next shift will occur. As it turned out it was 13 bars to the right of the hypocenter. With the adjustment for shift energy wave #10 starts off well but failed to even come close to the base target. Not to make any excuses but this happens sometimes with short, weak, energy signatures, especially during transitioning (moving from one energy signature to another). You will often see these type of overestimates in Energy Flow too and usually under the same circumstances. Now before I wrap this up for today I want to point out that finding these hypocenters is almost never this easy. It just happened to turn out this way today. In fact more often than not I can’t find them but this is still a fairly new project and hope to change that going forward. For now I would just say that if you find a shift within your forecast I can almost guarantee you will find another moving opposite of the first somewhere in the future. That is of course if the energy signature you are using doesn’t change. If it does, you start all over again. One final thing, for the record we are using model variation #5 here today and used #4 in the previous example.

Best,
Joe

YM_081317_a.png (55.7 KiB) Viewed 6638 times

YM_081317_b.png (51.76 KiB) Viewed 6638 times

[ForJL]

This was another low energy signature day with nothing very significant happening. While there was a shift forward 2 bars (32 minutes) I was never able to find a reversal shift much less the hypocenter. The energy signature had changed overnight forcing a model variation change to # 4 (from #5) so it is possible the energy burst occurred before I made the switch. At this point I’m just not sure but that’s what R&D is all about.

Joe

YM_081815.png (45.76 KiB) Viewed 6618 times

[ForJL]

Well, I tried to get a conversation going that I hoped would lead to an exchange of ideas and perhaps techniques but appear to have come up empty. Not a problem, perhaps next time around. Can always come back this too if there is interest.
Will be out of the office the rest of the day so thought I would post this now and wrap the subject up with it.


Joe

YM_082015_final.png (76.32 KiB) Viewed 6595 times