“The center post of a T can simply be viewed as a “Mirror in Time” in which the future is seen as an inverted reflection of the recent past. It is essential that you understand at the center post low, the pessimism of the recent past will give way to optimism in the future; the conservatism of the past will give way to speculation in the future, and the poor rates of return of the recent past will turn into superior rates of return in the future. If you don’t get this straight you will have great difficulty making money in the equity market.”
“The Law of Matched Trend Time” because it basically states the duration over which investors can obtain “superior equity returns” will always be equal to the previous time period in which returns were subnormal. A simpler way to put it is to say the market can only “make a strong run ” as long as it has previously ”rested”. As you might expect, the practical purpose of the theory is to anticipate the runs of “superior returns”
Terry believed that there was evidence based on his many years of work to conclude that a “natural law” is at work, suggesting that market advances may match prior Advance-Decline Lines.
Take a look at the Advance-Decline Ts, Historical Chart above.