ΣL Cycle Summary

Although some volatility has crept into the excellent cycle around 90 days of late, courtesy of high frequency power (see burst around 30 days below!), this wave is still fairly stationary and just about qualifies for a ‘C’ category rating in our system. Overall, price has grinded sideways for a couple of years now with this feature defining the price action within the consolidation. Worth noting and trading with the anticipation of increased volatility to the upside during the forthcoming up leg.

Time Frequency Analysis

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ΣL Cycle Summary

A fairly deep retrace for the down leg of this now excellent cycle in Oil was seen during January and into February. This continues the over arching theme of sideways price action in the black gold that we have seen over many months now. The cycle is now due it’s next trough and bulls will be hoping for at least a test of mid January’s highs to maintain any thought of longer term bullish momentum. The signal easily retains it’s ‘B’ category rating.

Trade Update

Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous report for this instrument, linked below.

Type: Sell - WTI Crude Oil 14th January 2025
Entry: 14th January 2025 @ 76.80
Exit: 21st February 2025 @ 72.14
Gain: 6.07%

Time Frequency Analysis

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ΣL Cycle Summary

Using UNG as our new proxy for Natural Gas phasing we can see here the previously mentioned cycle at around 105 days, still magnificent in it’s frequency stationarity over time. In this case a sample since 2021 over 13 iterations.

A gradual decrease in power (from lower frequency components) since 2022 has typified Natural Gas and this is even more clear when we subject price to our high pass filter, shown below. Should this power return the potential gains for the coming year are substantial, given we have a good model for timing. We have therefore also featured, in this report, a closer-in look at UNG, starting from early 2023 when the larger downtrend had largely subsided. This comes at the expense of a little bit of frequency stationarity but in the context of the wider picture it is easily ignored. The next trough, due March, should be widely noted by bullish advocates in Natural Gas in order to time the potential return of any lower frequency power.

Time Frequency Analysis

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ΣL Cycle Summary

The larger periodic components in Oil have been, for the most part, stuck in a turgid range over the last 6 months or so. Recently that consolidation has been broken with some upward price momentum, much to the relief of bulls. With this increased amplitude we can once again return to the higher frequencies and examine if there are any features worth noting for traders at this timescale. We note on this particular sample a cycle around 90 days is the most dominant feature and is likely peaking at the time of writing. Should the underlying trend be bullish with more upside to come from the larger, more powerful features, then the retrace detailed here will be shallow.

Time Frequency Analysis

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ΣL Cycle Summary

Bullish power from the larger, troughing wave around 16 months, has failed to materialise so far in oil with some largely sideways price action on show. This smaller cycle, notionally the 40 week nominal wave, is now also due a low and crucially, is phased to peak around the same time as it’s larger brother - early to mid March 2025. These two components working together could see some more power applied to price action, good news for the bulls over the next quarter or so. The cycle in particular has been quite stationary over the last 10 years and shows no signs of modulating, so far, via our sample below; taken since 2015 over 13 iterations.

Time Frequency Analysis

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ΣL Cycle Summary

This component, which was excellent in the timeframe of December 2021 to January 2023, is showing signs of returning to the power that distinguished it during that period. Subdued over the last year or so it has still retained some influence on price action within a larger sideways consolidation. A larger cycle low occurred earlier this year and is currently phased as hard up into at least the first quarter 2024. The fact this smaller cycle is now peaking should be seen as an opportunity to ride the larger trend after November, although we present it at the time of writing as a short term sell opportunity (see signal detail, below), such is the current phasing.

Time Frequency Analysis

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ΣL Cycle Summary

As we await the trough of the prominent longer wave around 17 months to develop in oil, we can observe that this component has dictated price action to a large degree over the last month or so. A sharp move down in July has once again established some amplitude for this wave in the frequency domain although it remains a strong ‘C’ category signal due to the wide modulation of the past. A subsequent move back up, with power, and breaching the peaks of early July will be a strong signal of the larger wave having bottomed out.

Trade Update

Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous report for this instrument, linked below.

Type: Sell - ΣL Oil Composite 1st July 2024
Entry: 1st July, 2024
Exit: 8th August, 2024

For a composite analysis, each constituent’s respective gain over the period is displayed, in descending order. The average of the constituent gain is also shown.

Constituent Gain:
Brent Crude Oil (10.76%)
WTI Crude Oil (10.62%)

Composite Average Gain:
10.69%

Time Frequency Analysis

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ΣL Cycle Summary

In this long term analysis the stand out periodic feature in oil is clear around 500 days (~ 16.4 months) and has been moving sideways/contracting since the prominent trough in February 2023. The most recent move up looks to be early signs of the latest trough iteration, with a subsequent peak anticipated in the first quarter of 2025, at the current wavelength. Initial targets are price peaks at $87.93 and $95.37.

Trade Update

Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous report for this instrument, linked below.

Type: Sell - WTI Crude Oil 27th October 2023
Entry: 27th October 2023 @ 86.07
Exit: 12th July 2024 @ 82.47
Gain: 4.18%

Time Frequency Analysis

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ΣL Cycle Summary

This signal picked up some amplitude in the up leg of the current cycle, which for bulls was very welcome and a sign of a return to the power (and therefore price dominance) of the past. The time frequency analysis will likely reflect this increase in amplitude over the next cycle if the power is now maintained to the upside. The downswing portion of the component is almost complete with a trough anticipated within the next couple of weeks at the current wavelength, stable around 105 days. If a trough of larger magnitude is now in place, expect the peaks around 3.16, 3.38 and 3.63 to be tested and exceeded in the coming months. We have the next peak of this wave due early September.

Trade Update

Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous report for this instrument, linked below.

Type: Sell - US Natural Gas 10th May 2024
Entry: 10th May 2024 @ 2.252
Exit: 5th July 2024 @ 2.417
Gain: - 7.33%

Time Frequency Analysis

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ΣL Cycle Summary

This component, modulated heavily in recent times, endured a period of drawdown from the most recent entry point long. It has retained a place on Sigma-L by the barest of margins due to historical stationarity and the recent increased amplitude. However, it should be also seen in the context of the exceptional longer wave around 16.7 months, last phased in October 2023 and which is phased to be troughing soon. Subscribers should watch out for that update in due course during July’s schedule - likely next week. Typically larger components will have more influence on price action and the longer wave, referenced, exhibits powerful stationarity.

Trade Update

Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous report for this instrument, linked below.

Type: Buy - ΣL Oil Composite 26th April 2024
Entry: 26th April 2024
Exit: 1st July 2024

For a composite analysis, each constituent’s respective gain over the period is displayed, in descending order. The average of the constituent gain is also shown.

Constituent Gain:
WTI Crude Oil (-3.45%)
Brent Crude Oil (-1.48%)

Composite Average Gain:
- 2.47%

Time Frequency Analysis

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ΣL Cycle Summary

An anticipated and standard move up for the component around 100 days in US Natural Gas is in evidence here. Still lacking the amplitude that was a defining characteristic of this wave through 2021-2022, it is sufficient regardless to maintain a good grasp of the phase, as shown in the time frequency analysis below. The signal is well defined spectrally and would likely be picked up by a simple static analysis, such as an FFT ,or even eyeballing the chart to some extent. That said, the dwindling amplitude, characteristic of modulation over time, has this signal rated as a high ‘B’ category in our opinion. Definitely one to track into the latter part of the year.

Trade Update

Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous report for this instrument, linked below.

Type: Buy - US Natural Gas 18th March 2024
Entry: 18th March 2024 @ 1.683
Exit: 10th May 2024 @ 2.335
Gain: 38.74%

Before and After

Signal comparison between our last report and the current time, in chart format.

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ΣL Cycle Summary

Continuing to lose power as time progresses, this shorter wave has produced a largely asinine, sideway cycle. The larger and more correlated to price component around 270 days is still pushing up, with a peak anticipated in June. We expect the shorter wave to once again come to dominance when larger components are neutral.

Trade Update

Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous report for this instrument, linked below.

Type: Sell - ΣL Oil Composite 15th March 2024
Entry: 15th March, 2024
Exit: 26th April, 2024

For a composite analysis, each constituent’s respective gain over the period is displayed, in descending order. The average of the constituent gain is also shown.

Constituent Gain:
WTI Crude Oil (-3.28%)
Brent Crude Oil (-3.28%)

Composite Average Gain:
- 3.28%

Before and After

Signal comparison between our last report and the current time, in chart format.

Time Frequency Analysis

Time frequency charts (learn more) below will typically show the cycle of interest against price, the bandpass output alone and the bandwidth of the component in the time frequency heatmap, framed in white. If a second chart is displayed it will usually show high-passed price with the extracted signal overlaid for visual clarity.

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ΣL Cycle Summary

After peaking around September/October last year, this component, notionally the 40 week nominal wave in oil, likely troughed in early 2024. Largely stationary from this sample since 2016, it is, like all other periodic components, under the constant changing influence of mostly larger, more powerful periodic waves. In this instance, influence comes mainly from the longer term component, detailed back in October 2023 at around 500 days. This is pushing hard down at the time of writing. The culmination of these features would suggest the component detailed on this report may well be anticipated to exhibit a left translated price and cycle peak, prior to falling into a major low due in the 3rd quarter this year. Subscribers may wish to take this into account when assessing the report and trade details below, which is listed as a late buy.

Trade Update

Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous report for this instrument, linked below.

Type: Sell - WTI Crude Oil 27th October 2023
Entry: 23rd October 2023 @ 86.07
Exit: 25th March 2024 @ 81.33
Gain: 5.51%

Before and After

Signal comparison between our last report and the current time, in chart format.

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ΣL Cycle Summary

This coherent component continues to be diminished as the price of US Natural Gas meanders in a sideways manner around the $1.5 - $2 mark, attempting to establish a bottom of both this wave and the larger component around 360 days. Both are now within the range of error for a low to occur so bulls should be alive to this opportunity. Whilst the larger component is due to peak in September of this year, this shorter wave should signify the turning point by establishing a right translated peak in May, before a pullback and continuation higher occurs into the 3rd quarter of 2024.

Trade Update

See also: Live ΣL Portfolio & History

Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous report for this instrument, linked below.

Type: Late Sell - US Natural Gas 14th February 2024
Entry: 14th February 2024 @ 1.61
Exit: 18th March 2024 @ 1.70
Gain: - 5.59%

Before and After

Signal comparison between our last report and the current time, in chart format.

Time Frequency Analysis

Time frequency charts (learn more) below will typically show the cycle of interest against price, the bandpass output alone and the bandwidth of the component in the time frequency heatmap, framed in white. If a second chart is displayed it will usually show high-passed price with the extracted signal overlaid for visual clarity.

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ΣL Cycle Summary

A relatively mild move up typified the up leg of this diminished wave in Oil, historically quite stationary and which is well worth keeping an eye on for subscribers. We have larger components out of phase with this wave, causing largely sideways price action. The component around 277 days (ostensibly the Hurst 40 day nominal wave) is due to trough shortly whilst the larger, more powerful component around 16 months (and ostensibly the Hurst 18 month nominal wave) is hard down with a significant low due in the summer. The short side is probably the side to be on until then for all periodic components in Oil as we can generally assume a 1/f type power law for the distribution of amplitude over frequencies - longer waves, in general, have more power to influence price action.

Trade Update

Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous report for this instrument, linked below.

Type: Buy - ΣL Oil Composite 8th February 2024
Entry: 8th February 2024
Exit: 15th March 2024

For a composite analysis, each constituent’s respective gain over the period is displayed, in descending order. The average of the constituent gain is also shown.

Constituent Gain:
WTI Crude Oil (10.49%)
Brent Crude Oil (8.59%)

Composite Average Gain:
9.54%

Before and After

Signal comparison between our last report and the current time, in chart format.

Time Frequency Analysis

Time frequency charts (learn more) below will typically show the cycle of interest against price, the bandpass output alone and the bandwidth of the component in the time frequency heatmap, framed in white. If a second chart is displayed it will usually show high-passed price with the extracted signal overlaid for visual clarity.

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ΣL Cycle Summary

A new addition to Sigma-L and one which we have been waiting to publish for some time in the energy category. We feel the time is now right with the component close to a trough, according to the current phasing. This wave, a longer term feature of US Natural Gas has been fairly stationary since 2015 and was exemplary within the main bullish period from 2020. Within the subsequent decline it defined a short term bottom in March 2023 prior to the downtrend we see now, price action closely following the down leg of the wave. The prominent shorter term component around 100 days has been clearly defined previously on site and is currently moving down, due a low mid March. The longer wave featured here is also well within the frequency modulation margin of error for a trough. They will, together, likely form a phase cluster for the incoming low, providing a powerful retrace and peaking Q4 2024.

Time Frequency Analysis

Time frequency charts (learn more) below will typically show the cycle of interest against price, the bandpass output alone and the bandwidth of the component in the time frequency heatmap, framed in white. If a second chart is displayed it will usually show high-passed price with the extracted signal overlaid for visual clarity.

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Instrument Summary

The OVX, or CBOE Crude Oil Volatility Index, measures the market's anticipation of future fluctuations in crude oil prices. It is calculated based on the prices of options contracts for oil, which are used by investors as insurance against price swings. Higher OVX values indicate increased expected volatility, reflecting uncertain market conditions, while lower values suggest a more stable outlook. The index provides valuable insights into investors' sentiment and risk perception regarding oil prices.

ΣL Cycle Summary

An uneventful move down for the latest down leg of the prominent wave around 50 days here in the OVX, anticipated from the previous component peak in mid-late January. Amplitude is slightly up on the last report although, as is easily discernible on the time frequency plots below, overall amplitude is gently diminishing over time for this particular periodic feature. Regardless, this continues to be a largely excellent frequency stationary signal, readily detected.

Trade Update

See also: Live ΣL Portfolio & History

Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous report for this instrument, linked below.

Type: Sell - Crude Oil Volatility 26th January 2024
Entry: 26th January 2024 @ 34.78
Exit: 20th February 2024 @ 32.17
Gain: 7.5%

Before and After

Signal comparison between our last report and the current time, in chart format.

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ΣL Cycle Summary

US Natural Gas, via the frequency stationary wave at around 105 days, moved up from early December in a bullish manner prior to establishing a left translated price peak, signifying larger periodic component are continuing to push down. The cycle peak likely occurred quite recently with a small whimper back up in late January, such is the amplitude modulation being applied to this component over the last few iterations. Indeed this signal might be consigned to a ‘C’ category for amplitude modulation alone, were it not for the superb stationarity in frequency over time, shown below in the time frequency plots. Taking a sample from January 2015 reveals a longer, somewhat modulated, component around 350 days dominating the smaller waves, shown below. That wave is due to trough March-April this year and will likely form a cluster of power with the smaller wave around 100 days, featured in this report and which is also due to trough mid-late March.

Trade Update

See also: Live ΣL Portfolio & History

Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous report for this instrument, linked below.

Type: Early Buy - US Natural Gas 14th December 2023
Entry: 14th December 2023 @ 2.39
Exit: 14th February 2024 @ 1.68
Gain: - 29.71%

Before and After

Signal comparison between our last report and the current time, in chart format.

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ΣL Cycle Summary

This wave, flat over the period since our last report, continues to diminish in amplitude, prompting a downgrade to a ‘C’ category signal until further notice. Ostensibly troughing at the current time but likely fighting against the increasing downward pressure of the longer wave around 16 months, it will be interesting to see how much power is left in this wave to the bullish side. Certainly more amplitude in the forthcoming cycle would give welcome clarity to the phasing - this wave has historical strength, notably in the downtrend 2022-2023. This can also be seen below in the low pass filtered price (yellow line) and the relatively easy to discern undulations of this component within it. Contrast that with the recent linear nature of the line since September 2023 for a stark demonstration of amplitude modulation.

Trade Update

See also: Live ΣL Portfolio & History

Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous report for this instrument, linked below.

Type: Early Sell - ΣL Oil Composite 22nd December 2023
Entry: 22nd December 2023
Exit: 8th February, 2024

For a composite analysis, each constituent’s respective gain over the period is displayed, in descending order. The average of the constituent gain is also shown.

Constituent Gain:
Brent Crude Oil (0.04%)
WTI Crude Oil (-0.37%)

Composite Average Gain:
-0.16%

Before and After

Signal comparison between our last report and the current time, in chart format.

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Instrument Summary

The OVX, or CBOE Crude Oil Volatility Index, measures the market's anticipation of future fluctuations in crude oil prices. It is calculated based on the prices of options contracts for oil, which are used by investors as insurance against price swings. Higher OVX values indicate increased expected volatility, reflecting uncertain market conditions, while lower values suggest a more stable outlook. The index provides valuable insights into investors' sentiment and risk perception regarding oil prices.

ΣL Cycle Summary

This prominent short term wave did not gain more amplitude from the most recent trough back in early January, as hoped for by volatility bulls, meandering along in a largely neutral to bearish up leg. The next trough is due mid February and this wave, losing power across the whole sample, will need to demonstrate it’s efficacy to maintain the ‘A’ rating over the next couple of iterations.

Trade Update

See also: Live ΣL Portfolio & History

Summary of the most recent trade enacted with this signal and according to the time prediction detailed in the previous post for this instrument, linked below.

Type: Buy - Crude Oil Volatility 2nd January 2024
Entry: 2nd January 2024 @ 39.05
Exit: 26th January 2024 @ 37.27
Gain: - 4.56%

Current Signal Status

Defining characteristics of the component detected over the sample period.

Detected Signal Class: B - learn more
Average Wavelength: 52.21 Days
Completed Iterations: 16
Component Yield Over Sample: 375.70% - learn more

Time Frequency Analysis

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