[Answer] How to Identify Trend Reversals and Turning Points in Industry Cycles?

[Answer] How to Identify Trend Reversals and Turning Points in Industry Cycles?

Take the derivative: when it starts changing from positive to negative, or the other way around, that usually suggests the function has reached a turning point.

The problem is deciding which industry variables should be turned into functions and differentiated, and how to determine whether those functions are actually differentiable. In a way, this is similar to circuit analysis, where one can rely on the physical property that voltage and current across capacitors and inductors cannot change abruptly.

When trying to define industry-level functions, it is often easier to find patterns in things like cash flow and debt.