A cycle lesson Nike July 2026
The Principle of Proportionality states that a cycle’s price movement is broadly proportional to its wavelength. For example, a 10-week cycle should typically produce a larger move than a 5-week cycle.
Why does this matter?
• It helps us understand the underlying market condition.
• It allows us to analyse the phasing and identify the dominant energetic forces.
• It provides insight into when velocity is likely to enter the market.
• Most importantly, it gives us context.
In NKE, the dominant force has remained negative throughout the phase. Each rally has been dampened by persistent selling pressure, resulting in left-translated cycles and a prolonged decline. While this chart appears to be approaching an important low, understanding the context is what matters most. Without context, every rally looks like an opportunity and every decline looks like a surprise. This is “likely” setting up for a long trade so we have a different bias based on the time frame we are working within and that is how we use money flow data. NOT to knife catch.