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The Periodical: 22nd April 2022
www.sigma-l.net

The Periodical: 22nd April 2022

Cryptocurrencies and stockmarkets move tentatively from 40 day nominal lows, metals tantilise and US natural gas blows up a top

Apr 22, 2022
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The Periodical: 22nd April 2022
www.sigma-l.net

Chart of the Week: USDJPY

Image
USDJPY from late 2011, the excellent 9 year/4.5 years components are visually apparent. The 9 year component made a most recent low in early 2021 and is currently peaking from the first 18 month nominal cycle, due to trough in June/July this year. There was an 18 year nominal low in late 2011.

Round Up

Another exciting few weeks in the financial markets has seen equity indices attempt to establish what should be the 40 day nominal low in the last week or two. Moves from this low have been varied, with the DJIA leading the way for the US markets while the European equivalents have floundered somewhat. The lows made around the world in early March are now confirmed in the majority of cases as a low of at least 20 week magnitude.

The currency market has presented some excellent opportunities recently. AUDNZD has likely peaked from it’s current 80 day component iteration and is heading for a low in mid May. USDCAD has bounced from the 40 week nominal low and has already reached the 1.267 area. EURGBP has chopped around in an interesting manner during it’s long grind down for the last year or so - this should be culminating in a 40 week nominal low soon.

Precious metals have teased us with the prospect of a 40 week nominal low after peaking in early March this year and falling subsequently to targets around the 20 week FLD. A move from a low of 40 week magnitude should easily break the 18 month FLD upside resistance seen for many months. Price has failed to do so thus far, raising the prospect of the 40 week low infact being at the next 80 day iteration, in late May. To assist us in both silver and gold the 80 day component, phased at the lows, is exemplary. One to keep a close eye on and we will bring timely updates for that in due course to subscribers.

Cryptocurrency continues to move in commonality with stockmarkets, save for individual issue amplitude modulation. Both Bitcoin and Ethereum are at 40 day nominal lows and are attempting to build upward momentum, although in a tentative manner so far. A weak (bearish shaped) 40 day component here would likely prompt a shift in the phasing analysis.

Finally of note in the energy market is US natural gas which climbed incredibly over the last few weeks into what is very likely an 80 day magnitude peak and possibly a 20 week nominal peak. The peak was fairly overdue and price is now falling with the kind of amplitude that accompanied the rise, working it’s way through a classic bearish FLD cascade on the way.


Upcycled

Further reading and insight into the fascinating world of time series analysis and signal processing:

Sigma-L
The Nominal Model
Modelling Markets Throughout Sigma-L readers will find references to ‘nominal’ cycles. What does this mean? Hurst coalesced his spectral work in ‘Profit Magic for Stock Transaction Timing’ into a concise and easily referenced ‘model’ for average wavelengths of components in financial markets…
Read more
a year ago · 3 likes · David F
Sigma-L
The Principle of Nominality
What is Nominality? The term ‘nominal’, in relation to Hurst Cycles, refers to the distinct naming convention of groups in Hurst’s nominal model. These are a collection of groups that coalesce around similar frequencies, named for ease of use and convention. In reality, periodic functions in financial markets are plagued by all kinds of variation, excurs…
Read more
a year ago · 1 like · David F
Sigma-L
The FLD
What is the FLD? Proposed by JM Hurst in the Cycles Course and other work, this simple tool informs traders of several important cyclical factors at work in the market. The FLD, or Future Line of Demarcation, is a humble tool with no complicated setup or need for intricate indicator configuration! However it is one of the most powerful tools we can use in…
Read more
a year ago · 3 likes · David F
Sigma-L
The Moving Average - Done Right
Ubiquity != Accuracy The above statement is apt to describe the humble moving average and the common use of it as an indicator by technical analysts of financial markets across the world. However, in the vast majority of cases (and certainly by a brief look at some charts on TA twitter), it is being used almost entirely incorrectly! This is also compound…
Read more
a year ago · 3 likes · David F
Sigma-L
The Moving Average - Band Pass Filter
What is a Band Pass Filter? In signal processing and the related topic of time-series filtering we often hear the terms ‘low pass filter’, ‘high-pass filter’, ‘band pass filter’ or ‘band stop filter…
Read more
a year ago · 1 like · David F

Twitter Highlight

The use of a moving average as a low pass filter for financial time series is covered in depth over at the Hurst Cycles Toolset section. For users of Sentient Trader we discovered the ability to smooth an FLD in a similar manner this week. Check out this series of tweets to learn how:

Twitter avatar for @TradingHurst
David F @TradingHurst
How to smooth an FLD in @SentientTrader step by step: 1) Select the 'Average Lines' tool, set the 'Average Length (in bars)' to 1. Set the displacement to a negative number that approaches half the cycle wavelength of the FLD you wish to smooth. Shown below. Fine tuning next..
Image
11:33 AM ∙ Apr 21, 2022
5Likes1Retweet

Performance Reports

We track each trade we publish to subscribers and collate the results into quarterly performance reports, check them out below:

September 2021 - November 2021

December 2021 - February 2022


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DISCLAIMER: This website/newsletter and the charts/projections contained within it are intended for educational purposes only. Results and projections are hypothetical. We accept no liability for any losses incurred as a result of assertions made due to the information contained within Sigma-L. This report is not intended to instruct investment or purchase of any financial instrument, derivative or asset connected to the information conveyed in the report. Trade and invest at your own risk.
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The Periodical: 22nd April 2022
www.sigma-l.net
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