AI
Wednesday, August 04, 2010 2:47:12 AM
Hope everyone has been well. I've posted the chart below previously which shows the Hurst cycle action combined with Gann/Astro based ellipses. In these ellipses, the structures of significance are the roof (or floor), the major (horizontal midline), and the minor (vertical midline). The dimensions of the major and minor, to construct the ellipse, are based on a Gann 'key' which is market specific. Each ellipse is started at the Hurst cycle trough - and then positioned so that the roof (or floor) contacts the price point of the first upleg peak (adjustment of the ellipse angle should there be a higher or lower price point is permitted, but as seen on the chart below, was not necessary).
The vertical colored lines are various Hurst cycles, by calendar days, which are mirrored and then allowed to independently march through the chart.
Courtesy and thanks is given to SilentOne for the Stochastic/cycle indicator at the bottom of the chart.
Observations:
1) Based upon the market price action, vertical line cycle confluence, and the Stochastic indicator - it appears that the 18 month nested low did arrive on July 1.
2) Each 20 week cycle segment progressed as would be expected - moving from the trough point to the roof position with price then attempting to hug the roof. The 'angle' for each ellipse was successfully able to be set at the top of the first impulse leg out of each 20 week nested cycle trough. 'Bullish' price behavior over the first 3 1/2 ellipses was demonstrated by the price action remaining ABOVE the ellipse major. Each 20 week nested cycle low saw a move in price down to touch/test the major (support) followed by a move back to the ellipse roof.
3) Note that the character of the price behavior changed abruptly on Apr 15/16 right where the price intersected with BOTH the 4th ellipses' roof and Minor. Following, there was one retest of the roof and then a breakdown of price, the first since the prior Hurst nested 18 month cycle low, with respect to the ellipse major.
4) Price action since the July 1 low is now of significance, especially given the nature of what is expected for this 18 month cycle. Note that in the current ellipse, price action has given us our first leg-up price point which allows the ellipse to be set - BUT - note the subsequent action (compare to the first cycle out of the last 18 month cycle low).
a) the ellipse 'angle' is shallower
b) price is being stopped by the previous ellipses' major which has been tested twice and is now acting as resistance and is bearishly holding price action below the roof of the current ellipse .
5) Stochastic is coiling up into overbought
This is the first cycle (and ellipse) out of this recent nested cycle low. Price action should be showing solid strength here - it isn't (thus far anyway - but the cycle is still young).
6) Current ellipse major lies at approx 1033 (white horizontal line), which if you look back in time is a price point which has seen a number of prior touches.
Based on the above, caution is warranted here. I suspect that at some point we WILL see a move back to the ellipse roof - but watch this ellipses major at the 1033 level. A break, imho, means look out below.
Regards
[URL=http://img801.imageshack.us/i/spxgannastroellipsehurs.jpg/]
[/URL]
Uploaded with [URL=http://imageshack.us]ImageShack.us[/URL]
The vertical colored lines are various Hurst cycles, by calendar days, which are mirrored and then allowed to independently march through the chart.
Courtesy and thanks is given to SilentOne for the Stochastic/cycle indicator at the bottom of the chart.
Observations:
1) Based upon the market price action, vertical line cycle confluence, and the Stochastic indicator - it appears that the 18 month nested low did arrive on July 1.
2) Each 20 week cycle segment progressed as would be expected - moving from the trough point to the roof position with price then attempting to hug the roof. The 'angle' for each ellipse was successfully able to be set at the top of the first impulse leg out of each 20 week nested cycle trough. 'Bullish' price behavior over the first 3 1/2 ellipses was demonstrated by the price action remaining ABOVE the ellipse major. Each 20 week nested cycle low saw a move in price down to touch/test the major (support) followed by a move back to the ellipse roof.
3) Note that the character of the price behavior changed abruptly on Apr 15/16 right where the price intersected with BOTH the 4th ellipses' roof and Minor. Following, there was one retest of the roof and then a breakdown of price, the first since the prior Hurst nested 18 month cycle low, with respect to the ellipse major.
4) Price action since the July 1 low is now of significance, especially given the nature of what is expected for this 18 month cycle. Note that in the current ellipse, price action has given us our first leg-up price point which allows the ellipse to be set - BUT - note the subsequent action (compare to the first cycle out of the last 18 month cycle low).
a) the ellipse 'angle' is shallower
b) price is being stopped by the previous ellipses' major which has been tested twice and is now acting as resistance and is bearishly holding price action below the roof of the current ellipse .
5) Stochastic is coiling up into overbought
This is the first cycle (and ellipse) out of this recent nested cycle low. Price action should be showing solid strength here - it isn't (thus far anyway - but the cycle is still young).
6) Current ellipse major lies at approx 1033 (white horizontal line), which if you look back in time is a price point which has seen a number of prior touches.
Based on the above, caution is warranted here. I suspect that at some point we WILL see a move back to the ellipse roof - but watch this ellipses major at the 1033 level. A break, imho, means look out below.
Regards
[URL=http://img801.imageshack.us/i/spxgannastroellipsehurs.jpg/]
[/URL] Uploaded with [URL=http://imageshack.us]ImageShack.us[/URL]
Discover What Traders Are Watching
Explore small cap ideas before they hit the headlines.
