Short Term Trading Member Forum

[SilentOne]

HUI Hurst Cycles

Long update. Gold has likely topped for the year, but there is always the possibility of one more blow higher. What I am more focused on is the USD as an important 18 month cycle low is imminent. However, the USD may not rally in earnest until after June. Thus there is still time for some distribution to occur for stocks etc.

As for the HUI we can say the following. The 14 month VTL was broken to the downside recently. This presents one of two possibilities. Either the 14 month low is forming right now, or, the HUI has already entered into a bearish phase for the current 14 month cycle. Price is currently resting on the 14 month FLD (yellow line). So if the 14 month cycle low did not come in Jan., there is downside risk as this low is formed. However, if Jan. was the 14 month cycle low, then price is likely to play around with the 14 month FLD and bounce higher until later this summer before a downward break is made into the 4 year cycle low later this year or in 2012.

Look at how the top in 2008 was formed. Price played with the 14 month FLD for 3 months before finally breaking lower. Once price breaks decisively below the 14 month FLD, the HUI is on its way into the coming 4 year low due late 2011 or in 2012.



We are likely to form a 14 week cycle low for the HUI this week. Price should be supported by the 14 month FLD just below (yellow line). A weak rally with unknown potential is likely into June some time. The 14 month FLD will be rising and provide a stop for long term holders.






The best buy lies ahead for gold and gold stocks, either late this year or into 2012. The 4.5 year low due at the end of this 14 month cycle should see lots of volatility. There will be commonality here with stocks in general as the 4.5 and 9 year low is due for stocks (eg. $SPX) and many world indices late this year into 2012. Thus, I'd look for a strong USD rally in the second half of 2011 to cause a fair bit of market angst.

GLGT.

cheers,

john

www.sentienttrader.com


P.S. I have run Sentient Trader using ICM (Initial Cyclic Model) settings, not Hurst's Nominal model. Thus ST is using a spectral analysis to identify the dominant cycles. I have always worked with 14 week, 14 month and 4-4.5 year cycles and on this ST agrees.

Below is a Summary of Sentient's Analysis:

Price is currently in the SECOND 3 day cycle, of the SECOND 6 day cycle, of the SECOND 12 day cycle, of the SECOND 24 day cycle, of the SECOND 46 day cycle, of the FIRST 88 day cycle, of the FIRST 29 week cycle, of the THIRD 13 month cycle, of the FIRST 46 month cycle, of the 0 year cycle,.

Updated FPA reveals that the dominant cycle has a wavelength of 13.9M, or 456 bars. This is assumed to be the 18m nominal wave, which implies that all waves will be (-16%) shorter than nominal.This cycle is RISING fast. The underlying trend to this cycle is currently slightly UP. Recent fulfilled projections however would seem to indicate that the underlying trend is STRONGLY DOWN. The future FLD indicates that this cycle will influence prices to peak soon, and then fall.

The sub-dominant cycle (next wave down from the dominant cycle) has a wavelength of 29.4w, or 206 bars. This is assumed to be the 40w nominal wave. This cycle is just beginning to FALL. This is probably the FIRST of 3 sub-waves. The underlying trend to this cycle is currently strongly UP. Recent fulfilled projections however indicate that the underlying trend is FLAT, probably turning UP. The future FLD indicates that this cycle will influence prices to fall for a short time, and then form a trough.

The pre-dominant cycle (next wave up from the dominant cycle) has a wavelength of 46.0M, or 1399 bars. This is assumed to be the 54m nominal wave. This cycle is FALLING fast. The underlying trend to this cycle is currently strongly UP. Recent fulfilled projections however would seem to indicate that the underlying trend is SLIGHTLY DOWN, but indicate that it is accelerating (speeding up). The future FLD indicates that this cycle will influence prices very little because despite near-term volatility the FLD becomes range-bound.

S L is currently STRONGLY UP (strength: 2 cycles)
The 46.0M CYCLE component of S L is currently FLAT, likely TURNING DOWN.
The 13.9M CYCLE component of S L is currently UP (strength: 1)
The 29.4w CYCLE component of S L is currently FLAT, likely TURNING DOWN.
The 88.5d CYCLE component of S L is currently FLAT, likely TURNING DOWN.
The 46.0d CYCLE component of S L is currently DOWN (strength: 1)
The 24.5d CYCLE component of S L is currently STRONGLY DOWN (strength: -5 cycles), and accelerating.
The 12.4d CYCLE component of S L is currently STRONGLY DOWN (strength: -5 cycles), and accelerating.
The 6.4d CYCLE component of S L is currently FLAT, likely TURNING UP.
The 3.2d CYCLE component of S L is currently STRONGLY DOWN (strength: -4 cycles), and accelerating.

The 12.4d cycle is the ideal trading cycle, with an average potential of 12.1% per half-cycle. This equates to 24.2% because of leverage settings.
As you have chosen a longer cycle than this to trade, the 24.5d cycle will be used as the trading cycle. Change the Trading Settings by using the Tools|Trade Settings|Edit menu.

CURRENT FLD PATTERN PROJECTION:
Price has risen over the past 4 bars (last close 523.44) in a generally RANGE-BOUND price movement, with the FLD pattern indicating an impending UPWARD move, because: It is possible that the first sequence of the FLD pattern has already been fulfilled, by the low of 507.98 on 13/05/2011 which would indicate that the second, UPWARD sequence of the pattern is now in progress.
The first FLD pattern sequence (ref #0) projects a price movement DOWN to a target of 492.04 by about 14/05/2011.
The second FLD pattern sequence (ref #1) projects a price movement UP to a target of 570.57 by about 21/05/2011. This move would imply a 2-tier cascade of price crosses over the 12 day to 24 day FLDs (est: 18/05/2011 & level: 528.35)