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September 19, 2016 09:00 AM
Cycle Projection Oscillator: Rocket science meets markets

The Cycle Projection Oscillator (CPO) is a technical tool that uses complex algorithms to filter multiple cycles from historical data, combines them and gives a graphical representation of their productive behavior. The CPO methodology employs proprietary statistical techniques to obtain cyclical information from price data. Other proprietary frequency domain techniques then are employed to obtain the cycles embedded in the price.


Google was fast approaching overbought territory in the CPO in early August just as the CPO indicated a top was forming in the stock. The CPO projects a significant downturn for the rest of the summer through October. This provides a strong shorting opportunity. (While social media does not come immediately to mind as the sector GOOG falls under, it does cover the space which is why it — or sister firm Alphabet (GOOGL) — falls in the Global X Social Media Index ETF (SOCL).

Nasdaq composite

For several months the CPO has been projecting a significant downturn — potentially a crash — in equities this fall, particularly in the S&P 500. Since the Nasdaq often leads the other indexes, we decided to take a look. The Nasdaq is confirming the CPO’s recent projection for the S&Ps, and as often is the case, appears to be leading the move. 
The CPO is projecting that Nasdaq has already topped in early August and will start a descent in front of the projections for the S&P 500. 

WTI crude oil

The CPO correctly called the reversal in crude two months ago and currently projects more downside. Crude briefly dipped below $40 per barrel in early August before rebounding more than $2 leading some to believe a bottom had formed. However, the CPO projects that crude will continue to lose ground through the fall before bottoming out sometime around Halloween.

About the Author

John Rawlins is a former member of the CBOT with more than 30 years of experience in trading and research. He co-developed the Cycle Projection Oscillator, which has been featured in Futures and numerous research reports, with an aerospace engineer to identify the dominant cycles in a data stream and project them into the future. Reach John at @cpopro1. You can reach John at