Hi YXI friends,

Markets aren’t pure randomness. They develop recurring rhythms. Flows repeat (buybacks, options expiries), behaviours repeat (trend-chasing, mean-reversion), and macro seasons repeat (earnings, Fed easing cycles).

Cycle analysis surfaces those recurring pulses so we can frame likely windows of strength/weakness, rather than reacting late to every tick.

Today, we perform a deep dive into the Asset Cycles across our coverage universe. We start with an introduction of the key concepts in Section 3, before applying our methods to the individual charts.

DISCLAIMER: This newsletter is strictly educational. Any information or analysis in this note is not an offer to sell or the solicitation of an offer to buy any securities. Nothing in this note is intended to be investment advice and nor should it be relied upon to make investment decisions. Any opinions, analyses, or probabilities expressed in this note are those of the author as of the note's date of publication and are subject to change without notice.

Please check out our glossary for explaining the acronyms, financial terminology, and economic data.

SPY, QQQ, BTC, AAPL, AMZN, GOOGL, META, MSFT, NVDA, TSLA, PLTR, TLT

We are making one change to our ratings methodology: if the YXI Signals switch from 1 to 0, instead of losing all 4 points, the asset would lose 1 point for every day the signal remains at 0, with a floor of 0. Vice Versa. This helps us adopt a more continuous approach to assessing the asset.

AAPL and AMZN lost points from the short-term correction.

MSFT lost another point from ML, now sitting at 0 for ML.

PLTR gained a point from ML and another point for breaking above the 50-day MA resistance.

You can read our explainer on the 4-3-2-1 framework here.

What is a cycle, and how do we measure it?

We take the price series, remove its trend, and examine its spectrum (think: splitting a song into bass, mids, treble). The strongest “notes” are the market’s dominant rhythms.

Example of a dominant cycle in SPY

How do multiple cycles combine?

Assets rarely move on just one beat. Instead, several cycles of different lengths coexist, i.e. shorter tactical swings layered on top of longer structural rhythms.

To capture this, we identify the top few cycles by score (power × prominence ÷ instability) and combine them mathematically into a composite wave.

The composite curve looks the way it does because it’s literally the sum of sine waves of different lengths: sometimes they align in-phase (amplifying the peaks/troughs), and sometimes they offset each other (muting the signal).

This explains why the combined cycle can look “lumpy” or irregular—it reflects the interference pattern of multiple coexisting rhythms.

Composite Cycle Example - Top 3 cycles in SPY over 3 years.

Is the cycles analysis a crystal ball?

A cycle is a probabilistic rhythm. We won’t be 100% accurate, and we shouldn’t pretend to be. What cycles give us is context - when the wind is likely at our back, when it’s expected in our face.

Used that way, together with our other analysis across machine learning, quantitative analysis, and technical analysis, cycles help us gain an edge in the noisy market.

How far should we look back?

A 10-year lookback emphasises structural rhythms such as policy cycles, liquidity cycles, and long-term investor behaviour loops. It’s great for identifying durable cycles, but it can dilute the more recent market regimes (e.g. post-COVID market shifts).

A 3-year lookback captures the current regime. This is what traders are reacting to now, such as positioning cycles, volatility regimes, and the latest macro narratives. It’s quicker to adapt, but risks overweighting transient patterns.

Today, we start with a 3-year look-back period across the board for the short-term analysis. Note that we display only the latest 1 year for better resolution.

Over time, we will make lots of tweaks according to the asset classes in terms of lookback periods and detection models. So the current findings are not set in stone. The strongest cycles themselves are not stationary either, as more data gets included.

The top 3 cycles are combined in orange. The dominant cycle, i.e. the most highly ranked of the 3, is dotted in pink.

SPY

The dominant cycle is 75 days. We potentially approach a cycle top around the end of the month.

QQQ

Similar to SPY, the dominant cycle is 75 days. We could see a top forming towards the end of the month.

TLT

TLT’s dominant cycle is much longer at 150 days. We could be starting the steepest part of the incline in the latest cycle, which is bullish for TLT in the near-term.

USO

USO has followed the combined cycles fairly closely - the top 3 cycles enjoy similar scores. The current cycle suggests USO’s price weakness could start recovering.

BTC

Bitcoin could be back into an uptrend soon, following the near-term cycle projection.

ETH

ETH could be in a more consolidation mood if following the combined cycles, which share close scores with each other.

GLD

GLD dominant cycle is 107 days, or around 5 months. It is currently in an uptrend approaching a potential top in October.

AAPL’s combined cycle suggests a potential top around the end of the month, with the dominant cycle’s peak expected in November.

AMZN is in the uptrend phase of its dominant and combined cycles. The two peaks point towards the end of the month. This is in line with our technical analysis.

The top 3 cycles rank closely together in terms of their combined scores. GOOGL is following the combined uptrend towards a potential end-of-month peak.

META’s dominant cycle lasts 188 days. It is currently in an upward trajectory.

MSFT was more bullish than the last cycle decline would have suggested. The rising cycle from September may keep MSFT’s latest pullback relatively shallow.

While NVDA turned down with the combined cycle recently, it is now back on the rising cycle trend. This could mean its pullback is shallow.

TSLA’s top 3 cycles are closely scored. Its inability to break out of the consolidation range coincides with a downward combined cycle.

PLTR’s latest weakness coincides with a sharp cyclical downturn. It has now overcome the trough and is back on the incline.

SOXX is now on the incline side of the combined cycle.

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Recent Notable Flows (% of AUM)

The flows are represented as a percentage of the AUM prior to the flow.

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