Sigma-L

Share this post
The Periodical: 9th September 2022
www.sigma-l.net

The Periodical: 9th September 2022

Cryptocurrency and stockmarkets spring from likely 80 day nominal lows, Gold and Silver continue collapse with trough soon and currencies in general continue to be smashed by a surging dollar

Sep 9, 2022
2
Share this post
The Periodical: 9th September 2022
www.sigma-l.net

Chart Highlight: USDJPY

Time frequency analysis from 97  to now
Once again the Dollar takes centre stage in our chart highlight but this time we examine the longer components. The 4.5 year component @ 4.1 years sample average will begin it’s peaking process toward the end of 2022. Bear in mind the underlying trend is still hard up, with a 9 year nominal component low in 2020 and. The 18 year component which troughed in 2012, will begin to influence price action more readily to the downside in coming years.

Round Up

The last few weeks have been tantalising, with both phasing analyses in Stockmarkets and Cryptocurrency needing resolution at the shorter term scale. We have been adamant that the previous 80 day trough iteration occurred around the middle of July and this is now likely the correct assessment, given the most recent strong bounce of the last few days.

Bitcoin and Cryptocurrency in general is either making the 18 month nominal low here or has one more 80 day component iteration to come (@ 55 days). Price should make a more marked interaction (support) with the 54 month FLD (orange) for the larger low in our opinion. It may well do this is a sideways grinding fashion via the current 80 day component. The focus at that point then moves to observing (and trading) the move up, assessing evidence as to the magnitude of the low and the possibility that it is the 54 month nominal trough. Bearish sentiment for cryptocurrency is high in the media and traditional financial outlets. Indeed the Fed’s top man, Jerome Powell, dismissed Bitcoin yesterday as ‘backed by nothing’. If ever there was a bullish macro signal…

Stockmarkets have come down to what is likely the latest 80 day low iteration with all finding resistance at the 40 week FLD in the process:

Twitter avatar for @TradingHurst
David F @TradingHurst
40 week FLD too much resistance for #stockmarkets as price continues moves to the 80 day nominal low due Sept. Below, a few more markets (with same phasing, of course). $SPX $DJIA $EUSTOXX and $NQ #NASDAQ #DJIA #stockmarkets sigma-l.net/s/stockmarkets…
Image
Image
Image
Image
Twitter avatar for @TradingHurst
David F @TradingHurst
Watching #stockmarkets and below the $SPX closely for evidence as to the placement of the most recent 40 day component trough. Clear resistance at the 40 week FLD and VTL compelling with the next 80 day nominal low iteration due mid September, according to this phasing. $SPY https://t.co/OvmTgJV3UN
6:27 PM ∙ Aug 26, 2022
6Likes1Retweet

One of the very most important aspects of trading with Hurst cycles is to use ‘The principle of commonality’. I see this so often with new students of time series analysis in financial markets. They will concentrate on one instrument obsessively and often misplace cycle lows (or peaks) causing confusion down the line as the wavelength stretches beyond reasonable frequency modulation. Commonality is useful because it collects any and all periodic components present in similar markets and produces a ‘phase clustering’ effect, increasing the signal to noise ratio. In this case the EUSTOXX and other European markets made a strong case for the previous 80 day component low to be mid July, forecasting the present trough we are bouncing out of at the correct timezone. There was also evidence from cryptocurrency. The same can be applied to currency and metals markets. Take advantage of this in your phasing analysis.

In the precious metals both Gold and Silver continue the bearish decline that was kicked off via the 40 week component peak back in March of this year. That peak was also likely an 18 month nominal crest. Whilst there are signs that the latest 80 day component trough could well be in, the recent bounce it is a little early. A trader asked me about this earlier in the week and my approach in this case, given the fact we also expect the trough to be of 20 week magnitude (at least), is to wait for the next 20 day component trough. At that point whether it is a higher or lower low, it will resolve the position of the 80 day component trough.

Energy markets continue to be vibrant. Oil, which peaked back in March from the 54 month component, has rolled over and is accelerating in it’s decline. A recent 20 week component low has produced a very weak bounce, breaching the proposed low within the first 40 day component. The 18 month nominal low is due late in 2022 according to current phasing. US Natural Gas has exploded in amplitude from the most recent 80 day iteration but has recently come back to our target of around 8 and the 80 day FLD. A 40 week nominal low is due here and, given the nature of the last 80 day component, could produce a rapid bounce above previous highs.

In the currency markets it is the dollar that is dominating once again, with cogent periodicity in the USDJPY and DXY. USDCAD has been excellent once again, hitting targets of 1.3 via an outstanding signal at the 80 day component level.

The excellent 80 day component signal in USDCAD, remarkably stationary over the sample period at around 76 days duration.

The dollar will start to begin the peaking process of the 54 month component over the next year or so. One of the first beneficiaries of this (temporarily at first) will be the EURUSD and GBPUSD, both of which are approaching troughs of 40 week magnitude. Watch out for financial commentators attributing the rise to only raised interest rates.

Twitter Highlight

One of the most beautiful signals of recent years is currently present in Gold and Silver with the 80 day nominal component running at around 55 days. Undoubtedly the signal is clean thanks to the relatively neutral influence of larger components over the sample period. This, in turn, producing an overall ‘sideways’ look to price action:

Twitter avatar for @TradingHurst
David F @TradingHurst
Absolute beacon: #gold and the the 80 day 'nominal' component since early 2021 an outstanding signal. Helped by the flat influence of larger components (sideways price action). Running circa 55 days wavelength over the sample period. #XAUUSD sigma-l.net/s/precious-met…
Image
9:10 AM ∙ Aug 3, 2022
7Likes2Retweets

Sigma-L - Hurst Cycles is a reader-supported publication. To receive new posts and support this work, consider becoming a free or paid subscriber.


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.
Share this post
The Periodical: 9th September 2022
www.sigma-l.net
Previous
Next
Comments
TopNewCommunity

No posts

Ready for more?

© 2023 Sigma-L
Privacy ∙ Terms ∙ Collection notice
Start WritingGet the app
Substack is the home for great writing