Headline Numbers and Summary

This Quarter: Nominal Gain: 48.66% | 3 Year Normalised: 67.95%

Year to date: Nominal Gain: 323.71% | 3 Year Normalised: 382.08%

The third quarter on Sigma-L proved to be a mixed bag with underperformance in cryptocurrency and equity markets. However, energy hugely outperformed with quarterly gains of 55.41%. WTI crude in particular provided excellent signals and actionable trades over the period.

Underperformance was most notable in cryptocurrency with a loss at 12.22%. This is a relatively small dent in the year to date gain of around 125% for our digital currency exposure and we expect the market will continue to provide excellent cyclicality going forward.

Stockmarkets also registered small losses at 6.06% this quarter, bringing the year to date gain in the equity markets to 21.70%. This remains a significant outperformance of the S&P 500 over the period 1st September 2021 to May 31st 2022. A sole exposure to which would have yielded investors a negative 8.64%.

The forex markets yielded a modest 3.5% over the period whilst precious metals gained 8.03%.

Read on for a detailed breakdown of each market sector with trade highlights.

Sector Breakdown

Energy

Nominal Gain: 55.41%

3 Year Normalised Gain: 49.98%

Nominal Gain (Year to Date): 128.28%

US Natural Gas and WTI Crude yielded good, mostly downside trades this quarter as price started a process of decline from what is likely a 54 month nominal peak around March 2022. Of note in over the quarter was a short trade in WTI Crude, targeting 95, on the 24th March, yielding 16.24%.

US Natural Gas was relatively subdued in comparison, yielding 6.49%.

Forex

Nominal Gain: 3.5%

3 Year Normalised Gain: 17.60%

Nominal Gain (Year to Date): 14.44%

Although performance in forex markets was modest this quarter, highlights remained. USDCAD, displaying sideways price action typical of a temporary neutral underlying trend (pause zone), revealed a swiss clock like 80 day component. This proved useful in the long trade of our report dated 24th March 2022 which looked to capitalise on a trough of at least 40 week magnitude.

Cryptocurrency

Nominal Gain: -12.22%

3 Year Normalised Gain: -2.94%

Nominal Gain (Year to Date): 125.49%

Smaller components have been attenuated in Cryptocurrency over the quarter, making trading somewhat tricky in the digital currencies as the bear market begins it’s final descent of the 18 month nominal component, due to trough October - November 2022.

The short trade enacted at the peak of the 20 week component during the start of April was a highlight in both Ethereum and Bitcoin, yielding 8.78% and 6.76% respectively. Subsequently long trades were nullified by the increased bearish influence of the 40 week component pushing down. The worst case yielding a loss of 15.85% in a Bitcoin from the report dated 9th May 2022.

Overall the loss was a relatively small in this market, where % gains are often significant, as was seen in the first quarter of our trading year.

Precious Metals

Nominal Gain: 8.03%

3 Year Normalised Gain: 12.28%

Nominal Gain (Year to Date): 33.80%

After the second quarter’s excellent performance in the precious metals Silver and Gold yielded a good 8.03% for this most recent period. Of note in both markets was the forming of the 40 week nominal peak around March-April 2022. This was significant in the fact that it indicated a prolonged period of price decline, contrary to many analysts assessment of these markets being nailed on hedges against inflation.

Highlights were short trades immediately after the identification of the 40 week nominal peak on the 10th of March reports, with Gold and Silver yielding 3.12% and 5.41% respectively.

Stock Markets

Nominal Gain: -6.06%

3 Year Normalised Gain: -8.97%

Nominal Gain (Year to Date): 21.70%

Stock markets, in a similar vein to cryptocurrency, had a disappointing quarter on Sigma-L this time. The decline from the 20 week nominal peak in late March was more bearish than anticipated and although it meant some losses subsequently, we now have additional clarity as to the phase of the larger periodic components.

It is highly likely the peak in early January 2022 was of 54 month magnitude across global stock markets. Assuming the previous trough of this component occurred in 2020 (the so called ‘covid’ lows) then the next trough is due early- mid 2024, at current average wavelengths.

Summary

Steady as she goes on Sigma-L in the 3rd quarter as we continue to outperform the market via the wonderfully robust signal processing techniques pioneered by JM Hurst.

Clearly no technical or macro analysis method is perfect (part of financial market price action is purely random after all!) and we wish to be transparent about performance on the site. A relatively quiet quarter here is a good opportunity to demonstrate this with the risk across sectors spread well to capitalise on those markets with profitable opportunities. In this most recent case it was energy and, to a lesser degree, the precious metals outperforming.

Thank you to all subscribers once again for your support.

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.