  We show that waves propagating in a transition disk can explain the short
term temporal behavior of Cygnus X-1. In the transition disk model the spectrum
is produced by saturated Comptonization within the inner region of the
accretion disk where the temperature varies rapidly with radius. Recently, the
spectrum from such a disk has been shown to fit the average broad band spectrum
of this source better than that predicted by the soft-photon Comptonization
model. Here, we consider a simple model where waves are propagating
cylindrically symmetrical ly in the transition disk with a uniform propagation
speed ($c_p$). We show that this model can qualitatively explain (a) the
variation of the power spectral density (PSD) with energy, (b) the hard lags as
a function of frequency and (c) the hard lags as a function of energy for
various frequencies. Thus the transition disk model can explain the average
spectrum and the short term temporal behavior of Cygnus X-1.
