The Primary Support

What is Primary degree? Primary degree is a holding period, a time duration. Any time duration more than 9 months is referred to as primary degree. Why do technicians and fundamentalists look at a primary degree? They look at primary degree because it is noise reducing and because it gives a big picture view. Primary view is similar to the 200 day moving average indicator. So a primary support is a support of more than 9 months. Looking at a group of assets from a primary perspective also illustrate strength and weakness, outperformance and underperformance.
DOW 30 still far above it’s primary support. Gold is testing it’s primary supports at 1,560. In some cases assets are nearing primary resistance instead of primary support. A clear example of this is the USD HUF. The price structure is testing 253 levels. And just like primary supports are key levels hard to break, similarly primary resistances are key resistances hard to penetrate. For us the respective levels at 253 on USD HUF are not easy for Forint bears to breach. This is why we continue to look at a topping view on HUF, which is ready for reversal rather than continued weakness.
Asset character can also be understood using primary supports. Some negatively correlated assets illustrate primary mirrors e.g. EUR USD is close to a primary support at 1.2 while Dollar Index is heading to a primary resistance at 88. Primary supports can also be used to judge on-going strength or weakness. Indian Sensex is above it’s primary supports at 16,000, while Chinese SSEC is below it’s primary support at 2,400.
One can also judge inter market divergence between related assets using primary support metrics. For example Brent is still at previous high primary support near 85, while the other energy major Natural Gas is still looking at finding some primary support.
Primary supports can be combined with a confluence of Fibonacci retracements or momentum. We have illustrated a few cases of momentum. DOW momentum is still above mean (zero) line and positive. While MSCI Asia ex Japan and MSCI Eastern Europe have a negative momentum as they test primary supports.
Markets will always diverge and assets move from outperformance to underperformance. This is why understanding large multi month trends is important because only by measuring larger trends can be do asset selection which offers lower risk and higher return.
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Our Jiseki Time cycles are seasonal patterns of strength or weakness in assets. They are derived from percentile rankings from 1 to 100. The higher the percentile more the chance for an asset to weaken and worst the ranking, better the chance for the respective asset to outperform. 100 is top relative performance and 1 is worst performance. The idea is that performance is cyclical. A top performer will underperform in future and vice versa. A top relative performer is also the worst value pick and the top relative underperformer is the best value pick. Jiseki is another name for Performance cycles, time triads and time fractals. The signals are illustrated as a running portfolio and as Jiseki Indices. These signals can be used by fund managers for relative allocations, traders for leverage bets and high net worth clients for selective trades.
Jiseki Interpretation. Signals are interpreted as crossovers between various Jiseki Cycles. All three Jiseki cycles (Jiseki 1,2 and 3) depict different time frames. Example: An asset is ranked above 80 percentile and all the three Jiseki cycles are pointing lower, this suggests a running SHORT SIGNAL. Our Jiseki Indices use different kind of exits based on price and Jiseki Cycles. We have color coded the (Jiseki 1>Jiseki 2) SHORT zones with brown sandy (burlywood) and grey (Jiseki 1>Jiseki2) for LONG SIGNALS.

 
Dr. Ionut Nistor is the co-author of Performance Cycles paper published in Kyoto Economics Journal in March 2009. Ionut is a professor of Corporate Finance at Babes -Bolyai University and a post doctorate fellow at the Kobe University in Japan. He is fluent in Japanese, Romanian and English.
The Bric Model from a Japanese Perspective
Ionut Nistor – Econohistory