Short Term Trading Member Forum

[arjunah]

Hurst Perspective on the SPX:

Greetings friends. The last you heard from me I was shorting the market last March and April expecting that to be the 4.5 year low. That remains my preferred phasing (though my trades did not work out too well as the Feds were aggressively supporting the market).

I have linked to a prior post (to our good friend airdale whom I miss dearly) explaining the Hurst rationale as to why I was looking for a low in March 08. Since that time there is more support for identifying that as the 4.5Y low. The best evidence is on a monthly chart which shows the March low bracketed by a downside break of the 9M FLD in late 07 followed by an upward break in May 08.

The price action since the March 08 is highly bearish and implies that the May highs are the high of the new 4.5Y cycle that began in March. I count the July lows as the first nominal 20W bottom, and expect lower lows into November-December when the first 9M cycle of the new 4.5Y bottoms.

Today's prices went below the 9Y FLD. A downside break projects to around SPX 550. But we have 4 years to get there, so it could turn into one of those frogs-in-a-pot type things. If another 500 to 600 points down sounds far-fetched, just remember that the SPX has lost 500 points in just the last year.

For the faithful out there how are still holding to Airedale's 4.5Y low of August 07, I would count the March 08 low as the first Nominal 9M low of the cycle and be looking for an 18M low between now and the end of the year. That is still a very bearish phasing, given the severe left translation in the first and second 9M cycles of this new 4.5Y.

arjunah