Post-1970 — Hickson / Cycles Course term. Related to the state table in Ch. 8 of Profit Magic.
Definition
The underlying trend is the sum of effects of all cycles longer than the cycle under study.
| Long-cycle phase | Contribution |
|---|---|
| Rising toward peak | +1 |
| Falling toward trough | −1 |
Why it matters
- A trading-cycle trough with positive underlying trend is a stronger long candidate.
- Hickson rule: go long only if the trading cycle and the two longer cycles are rising; shorts on peaks need extra caution (peaks are not synchronized).