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Cash, Airedale, how do you read today's action? Looks like the real thing, but....
Blackbelt
Thanks Cash and Bliss. (EOM)
Anyone have any TA insights on the price of oil? Or is it completely fundamentals and speculation-driven at the moment?
BB
Thanks USA. Your contributions to the board have great!
BB
DowDeva--
Welcome back. My comments were in reference to Cash's hypothesis that a G1 80w cycle low may be in the works for September. So I was talking about the current 20w cycle which appears to be coming in before Labor Day.
I suspect the market is planning a post-Labor Day rally, but I only anticipate--never speculate. I wait for evidence.
In my reference to the 10w cycle possibly cascading into an early 80w low, I was thinking of 10w cycle low due in the November timeframe. The 80w low would be ideally arrive after the first of the year, but it could left translate with the 10w cycle low sliding into an 80w nest of lows.
The market is becoming a more interesting place over the next 18 to 24 months.
BB
2:10 PM Eastern: Gentlemen, start your engines. (EOM)
Thanks Cash for the thorough reply. Here is the huge positive of Hurst analysis: It is signal processing, and if the market sends a signal contrary to ideal cycle expectations, we know it soon to immediately. And what I have learned from both you and Airedale is to dig deep and look wide to grasp the real meaning of any variations.
Thanks again.
Blackbelt
Cash, as I see it, an 80-w low in 8/04, a delayed 20-w decline in 1/05, and a 40-w low on 4/29/05 (with interesting discrepancies among various sectors previously noted) is the best fit of Hurst cycles to market action since 3/03. That places the next 80-w decline into the 11/05 to 2/06 timeframe (depending on left or right translation) with a bias toward left translation because cycles 4 years and lower will be heading down. I'm keeping an open mind concerning the latter idea that the bias leans toward a left translation.
Having said that, the decline into the 20-w could be substantial and difficult to distinguish from an 80-w nest of lows until it is all over. Perhaps we will need to see market performance through 2/06 to see clearly which paradigm reigns. If there is any weakness in the Hurst methodology, it is that it is often difficult to know what cycle is dominant until afterward. For example, right now, it is hard to know whether the current 5-week cycle will kick in and lift the markets one more time. When we start into the 20-w decline in earnest, you may claim that it is the 80-w, and who will be able to dispute it until after it is over. If the 80-w decline actually comes when I expect, it will be difficult to know for sure how to read the 10-w decline that precedes it. In other words, the 10-w decline could cascade into an 80-w low--or not.
Of course, there are signals that offer clues--FLDs being crossed and so on. Sometimes it is more clear than others. I'm just noodling through the issues. I consider you and Airedale to be among the best, and yet you often read the signals quite differently. I don't think this is anyone's fault but the weakness of the Hurst system--the Achilles heel. There is a natural human tendency to stretch the system to fit a desired view of the market action. If something doesn't quite fit, we rationalize--using one explanation in one case and a different explanation to cover over another exception.
Still, I agree that Hurst is the best explanation of market behavior I've ever seen, and the calls I've seen both you, Airedale and others make are virtually unparalleled.
Ted
Thanks! The best way learn is to listen to competing points of view, make your best judgement, and then let the ultimate judge--the market--reveal the truth. It's a fascinating, endless game.
Blackbelt
Cash--Would you care to explain your reasoning concerning the G2 40w/80W low coming in September? Does this mean you disagree that 8/04 marked the last 80W cycle low?
I'm interested in an open dialogue of these ideas, and if you would prefer to write privately, contact me at blackbelt1225@yahoo.com.
Thanks.
Blackbelt
Airedale - I want you to know...
You are greatly missed. For years you have published regularly, and I have been mostly silent because your experience, skills, and insights make what I have to say seem like child's play.
I'm not sure why you're missing. I hope you are well. On a number of occasions, I've seen you express the desire for more support and constructive interaction from board members. I would love to have seen that too, but for the most part, you have been in a league of your own, a party of one, a voice in the wilderness. At the same time, I have greatly appreciated the writings of PMiles, Cash, USA, and many others.
After four years of reading your posts, I'm just now becoming a believer and a practitioner. It was a long, slow process. Time and again, I saw you make calls that seemed outrageous, and I wondered how you could believe in the cycles with such certainty. I'm now beginning to grasp it, and have been experiencing the curtains being pulled back--just as you described. It's an awesome insight.
In any case, I hope you return, and if you don't, I want you to know you have made your mark. I appreciate the magnificent way you have made Hurst practical.
Thanks again.
Belt
Good work, USA. Thx. (EOM)
You have had a good feel for this market, USA, but I want to consider the possibility that this is part of a prolonged 5-week low consolidation with a final run to the top still ahead. If correct, market will peak week after next.
Blackbelt
Cash, I concur with your read. You will remember the divergence in the 10-week lows I noted among various sectors. The $RUT for example put in a distinct 10-week low on June 27. The last few major cycles seemed to phase in over a period of a couple weeks as various sectors put in lows. This seems to be happening again. If correct, the market will launch into a final run for the summer peak next week.
Blackbelt
Mr.USA: If the 40-week low came in April 29, and if the next 20-week low is coming in at the end of August, where do you mark the 10-week low that should fall somewhere in between? June 27 is your best candidate as it stands now.
Blackbelt
Mr.USA: If the 10-week low came in June 27, wouldn't a peak this early be considered left translated? And if left translated wouldn't that bode ill for the current up channel holding on the $RUT? In other words, if we start a retrace this week, couldn't we conceivably see the channel broken and a retrace to 650 by the end of August?
All questions that only time and the market can answer definitively, but would like to know your reasoning--especially concerning the early peak.
Thanks!
Blackbelt
SSsshhh! (EOM)
Cash, when I examine all sectors, I see a clear divergence between June 27 and July 7 as the 10-week bottom. June 27 does seem a bit early. Lately the cycle lows have spanned a period of a couple weeks because of this divergence among the sectors.
Here's a good list of contrasting pairs:
$TRAN and $BKX
$BTK and $DRG
$DJR and $UTY
$DJUSHB and $DJUSCH
RTH and HHH
RTH in particular barely baubled for 7/7. The split between the two dates is clear and strong. I'm not sure what we know what to make of it except that this split should temper our opinion and expections just a bit.
Any thoughts?
Blackbelt
Mr. Cash - If you would explain, what Hurst tools do you apply to come up with this analysis?
Thanks in advance.
Blackbelt
Cash, would you mind clarifying what you are looking at in terms of chart settings using a service such as barcharts.com?
"10w LMAs have NOT yet crossed for Naz/SOX/SPX/OEX/DJIA"
I'm assuming LMA means lagging moving average, and I'm simply wondering whether I can view this conveniently on a commonly available charting service.
Thanks!
Black
Re: $RUT
I think a case could be made that the $RUT needs to pull back here. June 27 was a little early for the 10-week low.
I'm not saying you're wrong in your interpretation--just that to insist you are right at this point is speculation.
I would like to make a distinction actually between anticipation and speculation. I can anticipate that we launch toward the next 5-week cycle highs from here, but if I put money on it without solid evidence to support my position, I'm speculating. Anticipating is looking at the evidence just as it appears and seeing both sides equally. Speculating is when I move into the territory of wish and hope because I have money on the trade. Nothing wrong with that--except that our perceptions too often become skewed when pressured by wishes and hopes.
I'm writing to myself here and learning from the experience. I see this is the biggest mistake traders make. Not realizing how sensitive our consciousness is. The moment desire pressures consciousness to see things a certain way, our perceptions bend and bow, and what we see may or may not be true.
If the $RUT closes above 645, this will lend credence to your case. I see a real possibility that we pull back first.
Black
I want to see the S&P break above 1220 and hold before calling the current situation bullish. The market keeps breaking below the trendline running from the last 4-year low, and this may be a clue that the 4-year cycle is peaking or has peaked.
I grant everything you have said, Airedale. But the market action out of the last 5-week low was tentative at best even though it squeezed out a couple strong days just before turning down hard. I see the possibility of tapping 1230 before turning down into the 20-week low, but this doesn't seem bullish to me. More like an offering of crumbs at a lackluster top.
I see the possibility that the market cuts a little deeper and builds a more substantial base at the 10-week low before moving into a summer rally.
All speculative possibilities until lines get crossed and the market defines itself.
So what I want to see is how the market actually handles this 10-week low. I want to see whether or not we cut deeper. If the market holds at this level, builds a substantial base, and then crosses lines upward on strength, that I will call bullish.
No bias.
Black
That tall flagpole at this point does not look promising. If we can get through 2 more days without serious damage, we could get this rally launched. I see yellow flashing lights here--the possibility the market is running into overhead resistance from downturning larger cycles. No conclusions yet. Like I said, warning lights. Will wait for evidence from the market.
Black
Evidence please. This board is not about wish and hope the last I checked.
Belt
NYMO +1 to 57. (EOM)
Airdale
Are you reading this as the 5-week low?
Black
Here is one of the politer responses I've received from financial professionals to whom I've presented the Hurst theory:
===================================
"In ancient times, man noticed that, while most stars rotated in unison around the earth, other stars wandered through the sky. (planet is the ancient Greek word for wanderer). Because the stars were thought to be fixed to a giant sphere that moved around the earth, it was assumed that these wanderers were also attached to spheres in some way. Originally they were attached to other spheres, with circular motions (epicycles) imposed on top of them. As more and more accurate observations were made, more and more epicycles (wave numbers?) were added to the system to make the system match the observations. Eventually there were more spheres, gears and circles than anyone could keep track of. But the system matched the observations.
To ask why the universe needed all this mechanism just to have points of light in the sky was heretical. The system matched the observations. If it didn't, small changes in the system could be made to accomodate the observations. (if a market low doesn't correspond to a cycle low, we must have missed a cycle, or we have discovered a new rule about the interaction of cycles).
Not until the question was asked, and a fundamental understanding of the reason why the lights moved the way they did, did science advance. And keep in mind, the first helocentric model of the solar system was less accurate than the Ptolemaic model it was attempting to supplant. Only when the circlular orbits were replaced with elliptical orbits (this, prior to a theory of gravitation which required elliptical orbits) did the helocentric model achieve accuracies better than the Ptolemaic model.
Humans are pattern-finding animals, even if the pattern only exists between their ears."
Bliss, como vai voce? Eu nao sou
daqui--eu sou da Bahia!
Just kidding. Lived in Bahia for 5 months back in 1973. Best time of my life.
Sometimes your bliss is so intoxicating I suspect you have been nipping the cachaca.
Belt
Cash, thanks for giving me a good laugh.
In general, money is a better motivator than a weightloss program. And we do live in an era of Internet communication, so it would seem that a strategy that works consistently would spread--or at least could spread fairly rapidly.
Let's say it takes 100 years for Hurst cycle analysis to become the dominant method, for computers everywhere to become programmed to trade Hurst. My question still stands.
It is fascinating even on this board, however, to see how differently people see the markets.
Belt
Airedale, you are the first to make Hurst practical in my experience. I also understand that you are sometimes lost and always learning. But your track record is reasonably good from what I have observed, and the way you explain it, it isn't that hard. Trying to read the book or interpret the course *is* hard without your help, though. Your dedication to the method makes it easier for someone like me to follow.
So I think this is the main reason that Hurst has not become widespread. Few people knew how to apply it. And then even among Hurst practitioners there are wide differences. You are the first in my experience to apply it with such success and consistency.
In conversations with professionals throughout the financial industry, I have found a general closed attitude toward anything like this. They just don't want to hear it. It's both amusing and amazing. Now this is just my experience, and there may be many out there with a more open attitude. In any case, this closed attitude will of course slow the development of any one system of trading and investing. Still, if the Hurst method begins to show consistent and verifiable evidence of reliability, we can only expect it to spread with ever greater speed.
So my question is this: If your application became widespread, how would this affect the market? Just as a theoretical question. I remember seeing Hurst address it in a cursory way, and he didn't think widespread use would be a problem.
Black
Bliss--I have to disagree. I see a distinct different between ewave interpretations and Hurst the way it is practiced here--and especially concerning the larger cycles which are generally easier to interpret.
There are certain valid trendlines--especially when anticipating 80-week and 4-year lows--which when crossed could be used reliably by a large percentage of the population to withdrawn funds from the market.
I believe this method could be verified scientifically and adopted by a significant percentage of the population. I understand that to date the market has operated by keeping the majority confused most of the time. I think that could change in this era of systems analysis and mass communication.
So my question still stands.
Black
Theoretical question: What would happen if the majority of investors began following Hurst and withdrew 100 percent of their retirement money from the market as we went into a 4-year nest of lows?
Is this question even worth considering?
Would the market make some unexpected adjustment if more and more people began following Hurst?
Mind-boggling questions I suppose.
Black
I meant to say a close above the downtrend line running across the highs from March to May will clear up any issues about the 40-week low being in.
This market looks like it has work to do studying the weekly $NYA. The chances of the weekly candlestick closing above the downtrend line this week are slim. Next week offers a reasonable chance, but the question remains: Can it, will it do it?
Black
Aire, what is your tolerance for a percentage loss when setting stops?
Looking at weekly chart of $NYA, we are primed and loaded for a rally, but the fuse has not yet been lit. A close above 7060, in my view, will clear up any issues about the 40-week low being in.
Still, I see it could go either way with the 40-week being in--or not.
Black
Are we still considering the possibility that the 40-week low is not in yet?
Black
Ander- Wealthlab
What kinds of percentage returns are you getting with your system? How does your system work?
Thanks for the info.
Black
VectorVest experiences:
Do you own it?
Have you experienced any losses or failures with it?
Do you recommend it?
How does it compare to other systems of analysis you're using?
VectorVest experiences:
Do you own it?
Have you experienced any losses or failures with it?
Do you recommend it?
How does it compare to other systems of analysis you're using?
OT Questions re: how stock prices are determined
Can someone answer these questions thoroughly or direct me to a site that does?
I understand how supply and demand, bid and ask, and volume all relate to price moves. My question is more technical. How does the price move actually occur in a mechanical sense? Who oversees the price move? What kind of oversight is there on the market maker?
Pretty basic questions that I have always put off to another day. Well, now I just really want absolute, definitive answers. How the hell does this work for thousands of stocks ticking up and down all day long? How is cheating prevented (and I understand there are accusations of cheating all the time)?
Thanks!
Black
FA, You're a little ahead of the game more than likely. We are more equivalent now to 1975. The moonshot could happen anytime of course in a crisis, but if current trends and cycles continue in a normal way, it could be a few years before we see the rocket launch.
Regarding cycles: The primary ones are 4-4.5 year, 8-9 years, 18 years, 36 years and so on. Three 8/9-year cycles brings up 24 to 27 years, and six 8/9-year cycles brings up 48 to 54 years, which would correspond to the Kondratieff cycle.
If you're looking for a 25-year cycle on gold, I see nothing compelling about the moonshot here.
Black