Short Term Trading Member Forum

[SilentOne]

USD Index Hurst Cycles

http://www.sentienttrader.com/

Long update.

Here's an update from this past winter. As posted at the iHub forum:

I updated the THT view of the USD. Not pretty.

The USD index did break below the 18 month FLD into the early Nov. low, a late 40 week cycle low which actually ran 50 weeks. Price took out the supposed 4.5 year cycle low of Nov. 2009. Bearish.

A 10 week cycle low is due and should lead to some kind of bounce in February, but then at some point the USD should slide into the next 40 week and 18 month low due this summer.

This looks like a bearish 18 month cycle for the USD Index, this coming in the first 18 month cycle off the Nov. 2009 4.5 year cycle low. If this phasing is correct, and it seems to agree with Bob's original work, then the USD is already in a bearish trend in this current 4.5 year cycle. An 18 month low is due in the June timeframe +/- month.

First the long view monthly back to 1995. ST still agrees with the airedale phasing discussed above.




Here's the weekly for this 18 month cycle. Note the nest of lows due in May to early to mid June. Given we are in the first 18 month cycle for the USD index off the last 4.5 year low, I would expect cycle periods to be slightly shorter or near typical averages. Thus the early May is a strong candidate for the actual 18 month low as gold and silver blew off into into important tops.

Here are the Sentient views using an expert model as reference.



Sentient agrees with this and is projecting a pullback but then a renewed rally to start in the coming days. FLDs for the 2.5 week through 40 week are aligned in a downward cascade position and projections for higher targets have been given based on the 10 week FLD. But we'd need to see the 20 week FLD crossed to the upside for confirmation.



So from a phasing viewpoint, and from what we would expect in terms of cycle periods to run to average lengths at this time, a nest of lows for the 80 week cycle look likely, and if not with the early May low, then very imminent.

On a daily view, we see the potential for a nest of lows very clearly. We may see a double bottom for the USD index, or simply a pullback into a 5 week low before a rally resumes. The 10 week FLD should provide support.



Here's a closer look at the FLDs:



And finally ST shows the FLD pattern and possible price path needed to reached the targets triggered. Also note that new lows for the USD index would disrupt the cascade pattern that is setup now and put into question the bullish USD outlook for the next 6 months.

cheers,

john

P.S. Here's Sentient's Analysis Summary:

Price is currently in the SECOND 4 day cycle, of the FIRST 9 day cycle, of the SECOND 18 day cycle, of the SECOND 36 day cycle, of the SECOND 76 day cycle, of the SECOND 20 week cycle, of the SECOND 42 week cycle, of the FIRST 19 month cycle, of the SECOND 58 month cycle, of the 0 year cycle,.

Updated FPA reveals that the dominant cycle has a wavelength of 19.3M, or 593 bars. This is assumed to be the 18m nominal wave, which implies that all waves will be (9%) longer than nominal.This cycle is FALLING, probably slowing down as it approaches a TROUGH (and an important nest-of-lows). The underlying trend to this cycle is currently slightly DOWN. 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 sub-dominant cycle (next wave down from the dominant cycle) has a wavelength of 42.8w, or 300 bars. This is assumed to be the 40w nominal wave. This cycle is approaching a TROUGH (and a strong nest-of-lows). This is probably the SECOND of 3 sub-waves. The underlying trend to this cycle is currently slightly DOWN, likely accelerating. Recent fulfilled projections confirm the trend is DOWN, but indicate that it is STRONGLY DOWN. The future FLD indicates that this cycle will influence prices to form a trough in a short while, and then rise.

The pre-dominant cycle (next wave up from the dominant cycle) has a wavelength of 58.4M, or 1778 bars. This is assumed to be the 54m nominal wave. This cycle is RISING fast. The underlying trend to this cycle is currently slightly DOWN, likely slowing down. Recent fulfilled projections however indicate that the underlying trend is FLAT, probably turning DOWN. The future FLD indicates that this cycle will influence prices to peak in a short while, and then to fall.

S L is currently DOWN (strength: 1), and accelerating.
The 58.4M CYCLE component of S L is currently STRONGLY DOWN (strength: -2 cycles), but decelerating.
The 19.3M CYCLE component of S L is currently FLAT
The 42.8w CYCLE component of S L is currently DOWN (strength: 1), and accelerating.
The 20.6w CYCLE component of S L is currently FLAT, likely TURNING UP.
The 76.3d CYCLE component of S L is currently STRONGLY UP (strength: 3 cycles), and accelerating.
The 36.4d CYCLE component of S L is currently STRONGLY UP (strength: 2 cycles), and accelerating.
The 18.2d CYCLE component of S L is currently STRONGLY UP (strength: 3 cycles), but decelerating.
The 9.1d CYCLE component of S L is currently UP (strength: 1), but decelerating.
The 4.6d CYCLE component of S L is currently STRONGLY UP (strength: 2 cycles), and accelerating.
A shorter cycle than that selected would have been the ideal cycle to trade, however because of the weakness (low amplitude) of that cycle, I would recommend trading a longer cycle.
The sub-dominant cycle is the ideal trading cycle, with an average potential of 14.7% per half-cycle. This equates to 29.5% because of leverage settings.
As you have chosen a shorter cycle than this to trade, I would recommend that you change the trading cycle, or change the leverage in the Trading Settings by using the Tools|Trade Settings|Edit menu. To allow the trading cycle to be changed automatically in circumstances like this, change the "Allow Sentient Trader to adjust trading cycle" optionThe actual trading cycle for the currently open trade is the 36.4d cycle. This cannot be changed during the trade.

The last phasing analysis was 3 bars ago. In that time price has RISEN by 0.01 to 75.03.
FLD PATTERN PROGRESSION:
Sequence Ref #0 is expected to reach a LOWER target of 74.09(-0.80 diff) by the same date, on 10/06/2011
Sequence Ref #1 is expected to reach a HIGHER target of 77.11(2.22 diff) 6.5 bars LATER, on 16/06/2011
DETAILED FLD PATTERN/PRICE CORRELATION:
Price did move DOWN (for 3 bars) as expected by the FIRST sequence (ref #0) of the previous pattern and has approached within 1% of the target of 74.89 (0.00 short) which is adequate to consider this target ACHIEVED. This point was reached 10 bars EARLIER than expected.
The SECOND sequence (ref #1)'s trigger is expected in 8.5 bar(s) and so I am not comparing pattern/price progress for this sequence.

CURRENT FLD PATTERN PROJECTION:
Price is currently moving DOWN (last close 75.03), in a DOWNWARD FLD pattern.
The first FLD pattern sequence (ref #0) projects a price movement DOWN to a target of 74.09 by about 10/06/2011.
The second FLD pattern sequence (ref #1) projects a price movement UP to a target of 77.11 by about 08/07/2011. This move would imply a price cross over the 58 month FLD (est: 10/06/2011 & level: 74.36) . This price move breaks above the 76 day, and the 42 week VTL implying that the price trough of 72.86 on 04/05/2011 is the expected trough of the 19 month cycle.