Let's review what additional value the weekly cycle (Pink) added to the forecast.
As we can see, the troughs and dips were predicted in great timing accuracy by the weekly cycle, almost to the day!
For the technical traders, using this tool could be a double confirmation to the bull flag template, providing a much earlier indication for the downward direction.
OK, we just witnessed a great example, a forecasting tool found nowhere else!
But how accurate is this tool?
Is it the holly grail?
Well, this really a great tool but it is not the holly grail and is not a 100% solution.
The main reason is the flip (inverse) phenomena:
This tool provides two forecast dimensions: Direction and Timing.
Expected Direction Accuracy:
From our experience, in about 90% of the cases, the direction provided by the projection lines is accurate.
The Flip Direction Phenomena and Resolution (inverted cycle):
From our experience, in about 10% of the cases, the direction provided by the projection line may be in opposite (inverse) direction.
This is a result of the mathematical method we use called Neural-Network.
To illustrate this flip phenomena we added the Red line in the example below.
The Red line is the opposite-direction line of the Bi-Weekly (Velvet) line.
The timing however, is still the same and provides the same best accuracy.
Note: In the case of TEVA this is obviously not a flip case.
Flip Direction Resolution:
To avoid the risk of flip cases, one should verify every potential CIT in that annual cycle, that the price direction goes hand in hand with the projection line direction. In case of difference, switch to the flip mode by following the red line. That verification should be run whenever the annual cycle changes direction, which is every few months.