I'll begin this weekend by revisiting the Cyclic Phasing from the 2009 low. I have found the 100 day cycle (blue bars in sub-chart 1 and blue arrows in main chart) to be relatively stable and uniform. The number sequence 1-4, then providing easy at a glance phasing for the 200 day and 400 day cycles too, without having to draw additional bars - well I like it!
I wanted to show this wide angle shot to emphasise the fact that we are in the 12th 100 day cycle since 2009 low, which amounts to being the 1200 day or 54month cycle due date for a low. These are big durations of course but this is the last 100 day cycle, so it can't be that far out can it? Based on the 11th cycle low, this 12th one should be the 23rd January, but I'll just take 'anticipated downward pressure' for now, out of this. Of interest is the 'cut' of the 400 day FLD in September 2009, marked with red arrows, and the subsequent touches since, also marked with red arrows. It seems to me that a test of this line might coincide with the 54month low, although a 'cut' to the downside might be just a little more interesting!!
In this closer view of the more recent price action, I have drawn in the VTL's (Hurst's Valid Trend Lines) that adjoin sequential peaks and troughs, for the 100 day cycle (1-3) and the 200 day cycle (4). First thing to notice is that the 100, 200 and 400 day trend lines are stacked to the downside (green below blue below gold!). This process from bullish to bearish has occurred whilst producing higher highs and higher lows. However, note how underneath this action, the thin green 100 day FLD was checked and then next the thin blue 200 day FLD, whilst producing those higher lows. Price is now sitting underneath the 100d FLD with the 200d FLD below. If price can cut this, then my thesis of the gold 400d FLD being the target line will be firmly on; even a retest of that last low will bring price under the blue 200d FLD. Now back to those VTLs: look at how line 1 provided a perfect backtest for the recent high. Line 2 joins the last 2 two troughs of the 100 day cycle, which is going downhill, notwithstanding the apparent significance of the higher lows in the Price Action. If price continues downhill from here, line 3 is also going to be validated and is going downhill steeper than line 2. We are also at the line 4, being the last two peaks joined for the blue 200 day trend line.
Take out Friday's low and we are beneath that line too and I think we drop to 15000 very quickly.
Dropping down in timeframes, I pick up the nominal 80day, 40day and 20 day Hurst Cycles, which translate to 56, 28 and 14 trading days respectively, according to C.Grafton's work on the matter). By looking at how price reacts to the FLD peaks and troughs, it appears to me that the 80(56t) day cycle is the dominant one. As a matter of elimination, the price just wanders over the lower order troughs until an 80 day trough appears, and then reacts, not just on this screen shot, but for some time now. First things first then; the trend. Well, the 14day trend line is below the 28day which is below the 56 day. Add that to the 100/200/400 bearish stack above and going long is perhaps not a great strategy for now!! Price is sat right at the 28day blue FLD, which is corresponding with its cycle low (see sub-chart blue line). This may hold up price for a bit but as the 56day cycle appears to be the dominant one, I expect price to cut this line and continue down into the 80day trough, where the VTL's for both 28day and 56day trends sit. If price does cut this line, recall from the 2nd chart, that price will also be cutting the 200day blue VTL. I do not think price will be stopping at this bottom in due course, especially given the 56day low is someways off, but I'll worry about this later next month. We do have some divergence in the MACD & 6hr momentum study, so likely this 28 day FLD will cause a corrective pattern of some sort, but I am readying myself for a thrusting shot downhill when it is over.
On the 4hr chart, we can see the same divergence in the momentum cluster & MACD, but price is pushing on through the 4hr Ichimoku Cloud and both the
daily 20 & 50SMA. Given the 28day FLD holding price up in the last chart, there is mounting evidence that anything less than a moon shot uphill, is going to end in some sort of collapse through this zone at some point soon.
Back to a daily chart and price is having a bearish go at this Ichimoku cloud too, but note the 45degree Gan Grid line sitting underneath it at approx 15100. The Gann Grid emanates from the 2012 hi/lo box, emphasised by the gold circles lower down, which I think has relevance to this year's action. That same area is also the 61.8% retracement zone of the move up from 14763. This would be an obvious place to put on another attempt at moving back higher, especially as the 50% line at 15242 is currently being tested with zeal. However, if it fails, then all the above holds.
So, here is the working chart. There is nothing bullish on here at all, and I am running with the very cheap 23.8% retracement in a wave 2, to fit my storyboard above. I'll start the week off with no trades on as I banked my shorts at 15205 Friday, and unless something completely off my radar northbound occurs, I'll be looking for short set ups on my 1min opening range charts that fit with the lower order FLD's here.
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