Short Term Trading Member Forum

[airedale88]

phasing Boeing.
this will be a quick version of a formal phasing analysis of BA. i don't plan to go step by step, explaining the entire method from the hurst course. some shortcuts can be used once index phasing and commonality phasing have already been completed.

for starters i use the monthly chart. Hurst used the monthly INDU chart for major cycle phasings and weekly stock charts of approx 180 wks for the phasing of nominal 18 month (78/80 wk),
9 month, and 20 wk cycles. with the charts available online things are easier.
from established phasings of broad market indexes two points can be used (commonality). oct 98 and march 03. (you'll see why mar 03 rather than 0ct 02 on the BA chart)

the monthly BA chart is below. i've used those two points to harmonicly phase in nominal 18 month lows for that 4.5 yr cycle, oct 98 to mar 03. very consistent 18 month cycles can also be extended back from oct 98. extension forward from mar 03 for the first 18 month low is a little less clear, so i mark it with a ?. doubling the length of the 18 month cycle does provide a possible second 18 month low, 34 months (2X17) from mar 03. the avg length of the 18 month cycles for BA has been about 17.7 months so that may be a fit.

the monthly BA chart with 18 month cycles.....



the next step is to transfer that mar 03 4.5 yr and 18 month cycle low (which has good confirmation by various hurst phasing tools and the commonality phasing model) to a weekly chart BA chart to see if the 18 month cycles can be refined.
on the weekly chart i've marked in a little orange v shaped thing where the Hurst nominal cycle length of 78/80 wks would fall based on using the march 03 low. no, not a great fit but, early august 04 is the nominal 18 month low for all broad indexes, phasing proof of which was done back in 04 and posted in this forum. i marked that with that purple thin little line. it seems BA made it's bottom 3 wks before the broad markets. whether that was caused by news (a straddle) or just normal cycle variation does not matter, i accept it as the possible low. i also mark it as a nominal 9 month low and a 20 wk low (priciple of harmonics). i also mark mid nov 03 as a 9 month low, using harmonics and the commonality model i had at that time that showed nov 17/03 as the date a majority of stocks i tracked bottomed for their 9 month low. i also filled in the past time 20 wk lows for this 18 month cycle just by harmonics and eye balling it, since exact locations are not important when the chart is extended to future time analysis for the location of the most recent 18 and 9 month lows. i next look for a low 9 months (39/40 wks) from that late july 04 BA 18 month low, again based on the nominal model. we have a low there at the end of april/early may 05 and i mark it as the 9 month low and also as a nominal 20 wk low. i use harmonics to place a 20 wk low before that in mid dec 04. that low was also explained on this forum, some thought late jan 05 was the 20 wk low but had that been used there was no reason to expect a 9 month low till the end of may 05 into mid june 05, and my phasing proved to be the correct one for the broad averages. i also place a 20 wk phasing mark in sept 05, allowing for variation one could use the end of august into sept as the low. the prominent visual low of oct 05 that shows on broad index charts i continue to regard as a cycle straddle caused by some fundamental events,katrina damage,etc. next,using nominal model lengths AND recent current sample lengths of BA's 18 and 9 month cycles,the BA low of late jan 06, 1/23, is marked as the next 18 month (and 40 and 20 wk) low. there have been some comments on the board of how could jan/feb 06 be an area of 18 month lows when so little price damage occurred ( those thinking that most likely are now even more influenced by the larger price drop of this late spring/summer sell off). examing BA from the mar 03 4.5 yr low shows that for this stock ALL cycle lows were of small amplitude which i feel answers that question in part, and the spread of individual stock 18 month lows thru out jan/feb 06 causing a muting answers the rest.

here's the BA weekly chart with cycle marks and final phasing remarks below the chart.....



i use the nominal model length of 20 wks and recent examples that run slightly less and locate the june low and mark it as a 20 wk low, the first off the 1/23/06 18 month nest of lows. that june low also is the low for NYSE COMP, SP500, Russell 3000, and XII (the institutional index, top 75 stocks held by institutions). i then extend out, using sample length, nominal model length, and harmonics to place those little windows at the right of the chart, indicating the expected time frame for the 9 month nest of lows. something does not fit though looking at price action. IMO this is an example of unknown fundamental effect on BA. whether it is a sudden change in direction of sigma el (all cycles plus long term fundamentals) or something of a smaller nature can't be determined right now though i think it's of a shorter nature. a few thoughts on things. if we look at a daily chart smaller cycles, 10 wk,5 wk, 2.5 wk etc all continue to top and bottom. cyclicality is still present. many other stocks, after bottoming in june, then went to lower lows in july. could july be the true 20 wk low? perhaps. a mid east war flared up in july, so that might have caused some stocks to make a lower low. i posted a few weeks back that there seems to be an avg length 23 month cycle independent of the Hurst nominal cycle that seems to show primarily in semi conductor and other tech stocks. the cause of this cycle, fundamental perhaps or not, i can't determine, but i recognize it's existence. that cycle bottomed in july. did that cause a cycle straddle affecting many stocks? i don't know. that can only be determined months down the line as more large cycles bottom again. even that can't be the cause for BA, which did not bottom until sept. was it some unknown fundamental, or maybe cycles just don't work and all this is bullshit. BA bottomed on sept 11 and rallied strong after that date. 9/11. after making a june low, BA, one of the leaders in the INDU rallies, pulls back in july as mid east tension flares up, rallies with the market again but then fails and sell straight down to sept 11 and reverses by the end of that day and rallies for 4 weeks. it now consolidates as we are at or near it's expected 9 month nest of lows. unknown or perhaps a better phrase unexpected/unknown fundamentals at work. fundamentals can have a sudden effect on cyclic patterns and IMO one has to apply the fpa methods of Hurst to help unveil the cyclic pattern that can be distorted by those fundamentals.

until more time passes, i feel one must respect the fact that the low of june may be correctly labeled as a 20 wk low for broad averages with as much if not more validity than labeling the july low as the same. that suggests an approx 5 wk window allowing for either possiblity when expecting the next 40 and 20 wk nest of lows. late oct into nov.