MESA Best-Fit Prediction

The MESA Best-Fit Prediction answers the question, “Among the sine-wave cycles that have wavelengths in the user-specifiable range, which one best fits the price data over its own wavelength, and what would that cycle predict over the next 10?”

It is a more customizable study that makes it easier to identify any short-wavelength cycles as they develop. Cycles that do not extend back close to 30 bars have not lasted long enough to be identified as the dominant cycle of the standard prediction, but other evidence sometimes indicates that they may exist. The study searches for cycles of wavelengths in a user-specifiable range that is usually set at the default of from 6 through 50 bars. Each one is then tested for goodness of fit to the price data over its own wavelength, instead of the 30 bars of the standard prediction. Goodness of fit is determined using standard least-squares correlation, and the best-fitting cycle is displayed and used as the basis for a prediction.