SMAP-2 2008.04

The stock market does not follow just a linear trend - it has some deviations from a linear function. Some cycles are well-known, such as, four-year presidential cycle or annual and quarterly fiscal reporting cycles. In addition, some cycles are defined by intrinsic characteristic properties of the system. The stock market performance curve can be considered as a sum of the cyclical functions with different periods and amplitudes. It is not easy to analyze the repetition of typical patterns in stock market performance because cycles mask themselves - sometimes they overlap to form an abnormal extremum or offset to form a flat period. It is clear that a simple chart analysis has a certain limit in identifying cycles parameters and using them for predicting.

Addaptron Software has developed Stock Market Analyzer-Predictor SMAP-2, computer program, which is able not only to extract basic cycles of the overall stock market or sectors but also to predict an optimal timing to buy or sell stocks. SMAP-2 calculation mainly based on extracting basic cyclical functions with different periods, amplitudes, and phases from historical quote curve. To detect correctly major cycles, the historical price data are transformed from time domain to frequency domain (spectrum).