S&P 500 - Market Cycles - 6th April 2023
Price moves up from the 20 week and 80 day component lows in early March, reaching near to our target of 4150. Now, a crucial turning point is ahead with a possible peak of the 20 week wave imminent.
Essentials: Nominal Model | FLD | FLD Trading Strategy | FLD Trading Strategy (Advanced) | Underlying Trend | Time Frequency Analysis
Analysis Summary
Back in late February we looked at the S&P 500 for signs of the 20 week nominal low, a wave that has been fairly coherent throughout the last two years. That low seems to have occurred in early March, reflecting a small increase in the frequency of the wave over the sample period. The time frequency analysis at the medium term (below) demonstrates the diffuse nature of this wave, indeed it interferes with the excellent component around 75 days (‘nominal’ 80 day wave) at some points. This is the cause of confusion for some Hurst advocates but it is the nature of periodic components in financial markets. They are not as static as some would portray but do occupy a distinct range of frequencies, that range is most easily discerned from a time frequency analysis where we can view the modulation over time.