phasing

Video: 40 Week Cycle trough forms in Equity Markets worldwide

40 Week Cycle Low

The following video by David Hickson over at Sentient Trader takes a look at all of the important markets around the world. We had been expecting a 40 week cycle bounce as Hurst traders and I believe it has now happened. What will happen next though? This next 40 week cycle should be less bullish (more bearish!) than the recent cycle and should form the 18 month trough in March/April 2016. The crucial line in the sand therefore is this 40 week low. The shape of this first 80 day cycle within the 40 week will be telling indeed. The US markets have generally been rolling over and reluctant to really push higher. The European markets traced out much nicer cycle shapes, in particular the DAX. The FTSE looks the weakest and I would not be suprised if a new high is not achieved in the UK market.

In the video an even more bearish scenario is envisaged in the Nasdaq. I do not share this view that the 40 week has already occured and the trough is straddled after only a 40 day cycle. It is possible but judging by the move up yesterday, today and the commonality principle with other markets it is now very unlikely. What I believe is more likely is that the 40 week low will be breached in the 2nd 80 day cycle of this 40 week cycle. So it will be straddled but not straddled in a massively bearish manner. If price breaks the 40 week trough within this first 80 day cycle be prepared to sell, sell, sell and get short below that low!

There is also a look at EURUSD, GOLD and GBPUSD to finish things off.

Leave a Reply

Your email address will not be published.