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HUI Hurst Cycles/Gann


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#1 SilentOne

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Posted 17 November 2008 - 01:55 PM

The HUI is 15 months along from the August 2007 low (last 55 - 56 week cycle low). By 16 months we should see a bear rally begin which should last until March 2009. Then the HUI heads for its 4.5 year and 9 year nest of lows in the fall of next year. This should coincide with stock market lows as liquidity will be needed for any good bear rallies.

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cheers,

john

Edited by SilentOne, 17 November 2008 - 01:57 PM.

"By the Law of Periodical Repetition, everything which has happened once must happen again and again and again-and not capriciously, but at regular periods, and each thing in its own period, not another's, and each obeying its own law ..." - Mark Twain

#2 mss

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Posted 17 November 2008 - 03:03 PM

:) Hi John, Nice chart. Are you suggesting the rally has started or will start in Dec.? Thx mss
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#3 SilentOne

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Posted 17 November 2008 - 03:34 PM

hi scott,

Are you suggesting the rally has started or will start in Dec.?
Thx mss


I can't tell if the low is in for the HUI (ie. 150) or whether another low will form from here. It is the general stock market that bothers me here. I can't see the HUI having much juice until the stock market puts in a better low. What do you think? However, once that low is in (thinking by mid-Dec.), then a decent bear rally into spring next year is quite possible. Until I see something bullish in the PMs, I'll sit on my hands. And forget shorting anything here IMO.

The same can be said for oil and commodities.

cheers,

john
"By the Law of Periodical Repetition, everything which has happened once must happen again and again and again-and not capriciously, but at regular periods, and each thing in its own period, not another's, and each obeying its own law ..." - Mark Twain

#4 beta

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Posted 17 November 2008 - 05:08 PM

Appreciate your updates, John. Agree that commodities (along with China stocks) seem to be bottoming first, though generally, I think we have one more low out there.
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#5 SilentOne

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Posted 18 November 2008 - 08:24 PM

hi beta,

We are very close to an IT bottom for gold stocks. A bear rally should start soon. Here I show a nominal 60 week cycle and when one considers the larger cycles, I'd add the following. The 4.5 and 9.0 year cycles are exerting considerable downside pressure, as evidenced by the massive decline and also the expansion of the current 60 week cycle (to 66 weeks and counting). This is typical cyclic behaviour as the larger cycles will distort the price action of shorter term cycles.

If the HUI puts in a test of the recent low on a gold selloff below $700, I plan to go 1/2 long for an aggressive IT swing trade. The other 1/2 would be added on a technical buy with the break of the downtrend line from the Sept. high.

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cheers,

john

Edited by SilentOne, 18 November 2008 - 08:26 PM.

"By the Law of Periodical Repetition, everything which has happened once must happen again and again and again-and not capriciously, but at regular periods, and each thing in its own period, not another's, and each obeying its own law ..." - Mark Twain

#6 SilentOne

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Posted 21 February 2009 - 11:37 PM

HUI27monthlynominal.png This is not for the PM bulls. My cycle work shows that the HUI and XAU will hit 9 year cycle lows in Oct./Nov. 2009. I have no idea how this plays out and I am not prepared to take on the risk of playing longs in this market. The 56 week cycle low (13/14 month) came in Oct. /Nov. as last suggested. The cycle extended slightly due to the bearish mode and the large decline from the 2008 highs. It could be a double bottom that comes late this year, it could be a higher high from the last low, whatever. I just know that I want to wait until that timeframe before I make serious long bets in this sector. Most assume that gold and PMs have hit their long term 8 year lows. I'm not convinced and that's why everything is still a trade here. I suspect what happens here is that gold can put in a higher high and the HUI/XAU fails to exceed their highs. Once PMs top, they will endure a serious decline into the projected low. I guess my risk profile has changed in the last year or so. <_< cheers, john

Edited by SilentOne, 21 February 2009 - 11:42 PM.

"By the Law of Periodical Repetition, everything which has happened once must happen again and again and again-and not capriciously, but at regular periods, and each thing in its own period, not another's, and each obeying its own law ..." - Mark Twain

#7 mss

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Posted 22 February 2009 - 03:34 PM

:) Hi john, thanks for your update. I am carefully adding PMs, and I mean CAREFULLY, as I too am not sure what the status is. mss
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#8 SilentOne

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Posted 24 February 2009 - 12:18 PM

PMs finally broke as I was expecting on a ST basis. The HUI was banging against the 323 level, which is a major Gann support/resistance level, as was 179 on a monthly closing basis. If you want volaitility, this is the place to be. I'd rather not. <_< The next date to watch is March 6th, and then April 17th. Either one could provide a nice low, but the March 6th turn will be the defining moment for PMs in 2009 IMO. The next 14 week nominal low would be due late April/ early May. No trading positions here. I missed my short opportunity yesterday/today on ABX and AEM. I had been day trading them short late Jan./early Feb. cheers, john
"By the Law of Periodical Repetition, everything which has happened once must happen again and again and again-and not capriciously, but at regular periods, and each thing in its own period, not another's, and each obeying its own law ..." - Mark Twain

#9 SilentOne

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Posted 22 March 2009 - 07:35 PM

I believe the PM market is still in the throws of a bear cycle until the 4.5 and 9 year cycles bottom. The current 56 week last bottomed in Oct. as expected. It was right translated in that it came late, the prior 56 week cycle having expanded. This is typical cyclic behaviour when a market is in a bearish trend. If we follow the current 56 week cycle to its nominal termination date, it would be Oct./Nov. this year. This is also when we would see a nest of lows for the 27 month, 4.5 and 9.0 year cycles. So there is a powerful conclusion approaching for the sector if this is correct.

A summary of the HUI cycles status is as follows:

7 week is up
14 week is down
28 week is down
56 week is up
27 months is down
4.5 year is down
9.0 year is down

So in my interpretation of the HUI cycles, the sum of the cycles underlying the 56 week cycle is down (sigma el is down).

Here is a view of the larger cycles and how they look relative to the 56 week cycle.

HUI_Hurst_4.5_year.png_56w_cycle_March_22_2009.png


The challenge for this sector now is the following:

1) If the 4.5 year and 9 year cycles have bottomed, then the HUI will have to rally more than 6-7 months. It is currently in its 6th month off the Oct. low. Previous bear market rallies in 2004 and 2006 lasted 7 months each. What's different this time is that the 4.5 and 9 year cycles are pointing down. So it is unclear how much higher and further the current rally can expand. But I am sure you can see the risk with each passing week if this phasing is correct.

2) Off the Dec. 2003 top (one I remember well), the HUI corrected for 17 months off that high. The high to high was 11 months (ie. Dec. 2003 to Nov. 2004). This was the bear correction leading to a 4.5 year low with the 9 year cycle still pointing up. Now we have the 9 year cycle pointing down. Off the March 2008 top, the HUI has corrected for 12 months off that high. The high to high thus far is 12 months (ie. March 2008 to March 2009). What's different is that this bear correction is leading to a 4.5 year low and 9 year low, a potentially more bearish scenario time and price wise. Also the length of the correction at 12 months and counting is too short IMO, considering a 9 year cycle low is at hand.

3) The HUI has to climb above HUI 323 on a monthly closing basis to gain Gann support at that level. You can see quite clearly how these levels are key on a monthly closing basis.

4) Gold is sporting a clear double top. Gold now has to take out its high and keep rallying here not only to support the miners here, but also to negate that bearish chart formation.

I have several short term FLD targets that were generated with higher upside targets with the latest rally. If the trend is bearish, some of these will not be met and the HUI tops out soon. If the HUI breaks out topside and goes for these targets, then bullish cyclic action takes over. I will not be a buyer though as I see far too much risk in this area.

Tough spot for bulls and bears.

cheers,

john
"By the Law of Periodical Repetition, everything which has happened once must happen again and again and again-and not capriciously, but at regular periods, and each thing in its own period, not another's, and each obeying its own law ..." - Mark Twain

#10 mss

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Posted 23 March 2009 - 06:04 AM

:) Great analysis john, thanks for you work. I'm on the fence, VST, trying to decide which way to "not" go. :D mss
WOMEN & CATS WILL DO AS THEY PLEASE, AND MEN & DOGS SHOULD GET USED TO THE IDEA.
A DOG ALWAYS OFFERS UNCONDITIONAL LOVE. CATS HAVE TO THINK ABOUT IT!!