Synthetic Oscillator for Estimating Dominant Market Cycles

Summary

This indicator constructs a sine-wave oscillator from an estimated dominant price cycle, with the stated aim of producing timely signals while reducing whipsaws. It first smooths the selected source with a Hann window, then applies high-pass and SuperSmoother filters to isolate cycles within user-defined lower and upper bounds. The filtered series and its rate of change are each normalized by a rolling root-mean-square measure and used as the real and imaginary components in a cycle-period estimate.

The estimated period is constrained to the selected bounds. A second filtered price series helps reset cumulative phase at zero crossings, and the oscillator is the sine of that phase. Users can inspect zero crossings and extreme readings; the article notes that peaks and troughs may arrive early and suggests adding smoothing to adjust timing. The document describes the construction and intended use but provides no comparative tests or performance evidence. Cycle estimates and signals depend on filter settings and market conditions, and the source specifies parameter bounds rather than a trading system or validated entry and exit rules.

Key ideas

• A Hann window smooths the source before band-limited filters isolate the target cycle range.
• The filtered price component and its normalized rate of change form a complex representation used to estimate the dominant cycle period.
• The estimate is clipped to user-selected bounds, and a secondary filter resets cumulative phase around zero crossings.
• Taking the sine of cumulative phase produces an oscillator that can be read around its zero line and extrema.
• Oscillator peaks and valleys may be early, so additional smoothing can change signal timing; no performance tests are provided.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.