Analysis and Trading based on Envelopes, Waves, Cycles

courtesy of Chris Grafton (last Hurst Notes received)

Hang Seng Composite - declining into a 40 day cycle trough, due in about 10 days.

We are focused in on HSCI Index's first 40 day cycle out of what looks to be a 20 week cycle trough that posted in late August. The 40 day cycle trough is due in the first week of October circa 2,664. The 11 September price low is a 20 day cycle trough, which means that we are now in the second 20 day cycle of the current 40 day cycle.

Despite the magnitude of the ostensible 20 week trough 29 days ago (i.e. the 20 week cycle should be rising now) the overall complexion here is bearish. The 40 day cycle peak on 4 September is left translated (early) which is negative and the last 20 day cycle rally was only 5 days long and fell short, again negative. Our view is that price stages a muted 10 day cycle upswing in the next few sessions and we think this is one to fade and sell into the 40 day cycle trough.

without using "Time Gaps" we can make some dollars !

HONG-KONG INDEX Daily

this table generated by Sentient Trader will allow us to talk about "Hurst Nominal" (and me to pontificate about this (complex) subject)

Attached Image (click to enlarge)

The First Column of above table shows you the Hurst Nominal Model .

At least the last one of the Course.

The last one because Hurst in his book and in his Course 3 different but related "Nominal Modesl"
This one is the last one, the simplified for the common guys, the Dummies.

The idea is that you could easily memorize the "model". Hurst wrote explicitly that in the course a simplified "model" for the dummies for mnemotechnic reasons.

Hence the 2 relationship between the successive "Cycle" lengths 5 D, 10 D, 20 D, 40 D ,80D
.
then a 20 W, 40 W, (9 Months) 80 W (18 months)

At this point Hurst wrote that the simplified nominal model shows a logical gap beween the Cycles expessed in Days and those expressed in weeks - (for mnemonic reasons for the dummies you and me)

then you have Cycles expressed in moonths / years 18 months 4,5 years and 9 and 18 years with a n unexplained relationship of 3 between 18 Months and 4,5 years

Nominal for Hurst means "in name" . Then it is just a labeling of Cycle.

Unfortunately most people absolutize the " nominal "model " instead of relativizing it, of seeing it as a Cycle Grid, as a Roadmap for Cycles.

When you use such labeling expressed in Days or weeks etc subliminally you think :

a) that the cycle has not the "correct" lenth (of the Model)
b) that if your 80 D cycle is in fact 59 Days long, your cycle is "shorter" and/or " in advance"

that if your 20 weeks cycle is 27 weeks longs , your cycle is "longer " and/or "late"

the "actual" column gives you the current status (lengths) of the cycles as determined by Sentient Trader

It is what Hurst calls " the Current Cyclic Model" the real thing - at least within the parameters used by Hurst and by the software

"variation" column gives you the variation in % of the actual values of the nominal model used by Sentient Trader relatively to the values of the Nominal Model- first column in parenthesis

these values are slightly different from those of Hurst Nominal Model

for your information there are many "nominal model(s)"

this one hereunder is the model used by Edward Dewey . Dewey created this "model" in 1944.

This model as you can see do not take into account short "cycles"

NQ M1 last one for the week:

One of the (various) problem when using a "cyclic model" is that, in the market, it exists almost no regular cycle but almost only "irregular" cycles that your (our) brain tries to hierarchize and classify to put order in cyclical chaos (real life)

For example assume your cyclic model shows a 3-month cycle and a 6-month cycle.

In the real life you find a 4,5 month by counting bars on your fingers or/and using some frequency analysis tool .

How do you evaluate this 4,5 month cycle ?

Is this 4.5 month cycle :

- a longer 3 month cycle
- a shorter 6 month cycle
or just a 4.5 month cycle

under which conditions can you add this 4.5 month cycle to the nominal model you use ?

HSI Daily

Envelopes

PB if you don't mind could you post a 6 year cycle for the ASX200. Unable to do so on trading view as yet. Just trying to see the bigger picture as the ASX is forming an ascending triangle.

use a Weekly chart 6 Years = 312 weeks