DJIA: Hurst Cycles - 20th December 2022

After the formation of the 18 month nominal low an excellent signal at the 20 week component is guiding us. Has the peak formed of this wave? We look at the FLD evidence and time frequency analysis.

Essentials: Nominal Model | FLD | FLD Trading Strategy | FLD Trading Strategy (Advanced) | Principle of Nominality | Underlying Trend | Time Frequency Analysis

Analysis Summary

Whilst the S&P 500 and Nasdaq have responded meekly to what is highly likely to be the 18 month nominal low, formed in October, the DJIA has rocketed. No doubt this is due to the constituents but it once again highlights the need to use commonality in our analysis to increase the signal to noise ratio for periodic components.

At our last report we mentioned how the shape of this next 20 week component will give clues as to the underlying trend present:

From 1st November Report:

What is interesting now is how this next 20 week component unfolds in cyclical terms via price action. The initial move has been exuberant, in fact the DJIA has had one of the most bullish reactions of all global equity indices, due to it’s composition. If price forms a fairly neutral 20 week component (perhaps a slightly higher low) then the…