Fixed recurring periods of rise and fall are found in many natural and man-made systems. It should not be surprising then to find them also in financial data. However producers, speculators and buyers are not aware of their presence.
For example here are two graphs of Henry Hub natural gas futures prices. The first graph gives the normal view. The picture is one of a volatile and uncertain market. It is the view any company buying or selling natural gas must live with every business day.
The second view is of natural gas prices alternating between rising prices and falling prices in a fixed recurring pattern.
Which view of natural gas price action gives more control for the business? The data is the same. Only the structured view provides insight into the underlying make-up of the market. In doing so price volatility is reduced (and explained) and opportunities open up during the fixed periods of price rise and fall.
By providing the exact timing and duration of these periods in their chosen market SMIs are able to unlock the potential of this naturally occurring feature.