Replies to post #16656 on Short Term Trading Member Forum

[Blackbelt1]

The $FTSE, $CAC, and $BSE have all been following the same cycles as the $NYA. None of the former delivered any kind of measurable low yet where we would expect the 80-week nest of lows.

What's up? Or just how will this blow up?

BB

[mr_cash4]

blackbelt, I am NOT trying to criticize you, but your post shows that you do NOT fully grasp the cyclical theory. Cycles ALONE do NOT say which way the market is going - it is the fundamentals, or more accuratley investors/traders' perception of the fundamentals that determine which direction the market is going to go.

BUT, the PATH that the market takes will be goverened by cycles, i.e. it will still follow the cyclical model, e.g. we still will see a 10w low every 48-56 tradings days, but it the FUNDMENTALS will primarily determine if it's a higher or a lower low. Sometimes large cyclical lows result in "market crashes"; other times large cyclical lows result only in mild pullbacks or consolidations only.

Remember, Hurst himself stated that fundamental events affect the AMPLITUDE of the cycles - for example, there is NO real cyclical explanation for the 2000-2003 brutish bear market - what large low (apart from the 4-4.5 year cycle low) did we hit either on Oct-02 to warrant a 85% drop in Nasdaq????

If a "perenial bull" were to criticize the cyclical theory, he would say that cycles are bunk because save for the 1929-1932 crash and the 2000-2003 crash, ALL other 4-4.5 year cycle lows in that time period resulted only in small-to-moderate sell-offs. So, WHY the crash in 2002/2003? And why the 1987 crash, which does NOT fit ANY large cyclical low either, not even a 4-4.5 year cycle low?

I can't really explain, identify or even measure the fundamental info that's affecting the cycles, but I can CLEARLY SEE how that FUNDAMENTAL INFO affects the cycles - and for whatever reason we got a huge "negative" increase in amplitude into the Oct-02 / Mar-03 LOW, and now it appears that we are getting a large "positive" amplitude increase - why now??? and, again, why the Crash in 2003??? nobody knows for sure, but we can surely "measure" it by looking at the cycles, and imho just trade the cyclical projection without worrying too much why the market is NOT following the pure cyclical ideal.

so, IF we are in the general time-frame for the low, and even though the drop into that presume large low was only modest, we have broken above ALL FLDs/FMAs - hence, go long and stay long until you see CLEAR (cyclical) evidence that the rally is over.

[Vestor_2000]

Excellent post

Blackbelt1, we have not exchanged messages before, but I wanted to compliment you on your excellent post, though I realize others may disagree with your perspective.

I have looked in on this board during the past few months and occasionally have participated, mainly because it is comprised of very good people with excellent ideas and I wanted to learn more about Hurst. However, at the end of the day, I have found many of the predictions about price to be off-base. I do not undertand EW, but it seems like everytime the market does something different than what was projected, there are a million excuses and changes from one wave to another in retrospect. I do not mean to be disrespectful to anyone on this board, but candidly, the following of Hurst cycles appears to be the same thing. There were calls in December for a much lower market than what we got and we've seen what happened the first week of January, but we quickly and collectively moved on to the next round of predictions without much of an examination of past predictions. So, I am left with wondering the value of Hurst when I look at it with a critical eye.

Now, having said all of this -- and more to the point of your perspective -- I follow technical analysis and the kinds of charts and indicators many of us review. But, guess what, they haven't been real clear either. Ultimately, I take a hard look at the COT Report for the S&P 500 (x$250) every week. The commericals (aka, the smart money), have grown substantially more net short the past two weeks. Unfortunately, I am not wise enough to tell you how much is normal hedging activity and how much is concern about the next drop in the market. I can tell you these folks were net long for the first time in a year at the start of the October rally. I also know, based on my research, is that when these particular traders are net short to the level they are now, one should not step in front of the on coming train. To be more specific, the commercials are net short nearly $17 billion. They haven't been this net short since mid-January 2005 and we know what happened during that period.

Now, consider the following link:

http://www.bullandbearwise.com/FOMOOut.asp

I do not understand all of the nuances of the attached link, but many on other boards point to the FOMC's operations and their seemingly daily dump of liquidity into the system. If this is in fact what is going on -- especially as the Fed is known to us TA -- then how in the world will anything anyone of us do work -- be it EW, Hurst, traditional TA and the like -- when the Fed is gaming the system, especially so Alan Greenspan can go out with a bang???

One last note to my last point, history shows that a financial crisis of some sort or another has set in within two months after the last three Fed Heads took over, so you really have to wonder what is in the cards for us during the next few months after Bernanke is installed. Time will tell. Meanwhile, all I think we can do is observe, "the trend is your friend," and hop on board our favorite moving average until it tells us to do something else.

Sorry for my little rant, but I felt a need to finally say something about some of the Hurst predictions and your excellent, well written post provided me with that opportunity. Again, no offense is meant to anyone on this board, all of whom work hard and make an honest attempt to present their views and kindly share them with everyone.

JMHO.

[airedale88]

belt, ..."It went up so we blame the 9-year cycle. This kind of reasoning subtracts from our credibility IMO. It sounds like we are just making stuff up to fit whatever the market delivers. Given the size of the last 80-week and 40-week cycles down, it seems at least a little suspicious to now point to the 9-year cycle as the lifting force. Why would the 9-year suddenly kick in now when it didn't in 2004 or in the spring of 2005".....

belt, where do you think the max momentum is for any cycle's upside?


"it is reasonable to say that the energy of the 20-week cycle down was delayed into January"

energy? delayed? explain what you mean by this. what would cause a delay in "energy"?

[BlissBull]

thanks belt, "when everyone thinks the same, nobody is thinking very much"...


"MAJOR CRASH" TIME!!!