6 replies to this topic

[airedale88]

the creator of this system describes this signal (aside from occurring at bear market bottoms), as "this may take place at interim stages in an on-going bull market or it may reverse a steep INDU sell-off. it occurs when the INDU tags it's lower band and the NYSE 21 day mv avg of breadth is positive or nearly so"

that's what we have today. my only caveat is i think it's prudent to wait a day or more to make sure the breadth indicator does not fail and make a new swing low. in the notes i have the author indicates 39 signals were given over a 20 yr period from 1969 to 1989, 80% were profitable with an average gain of 10%, the 20 losing signals had small losses on average. add in that we are in the time window for a nominal 20 wk cycle low

if the signal deteriorates i'll post it.



the current buy and the previous july 06 buy are noted on the chart below...........

[pdx5]

Your buy signal would be quite good if economy base was similar in both cases. The difference here is that last july the sub-prime fiasco was no where in the media. Also the Yen Carry Trade was flying high last july. Now with the Yen strengthening rapidly, YCT is in flux.

[arbman]

Airedale, I am closer to be with you on the long side, as you said, I think it is worth to wait a day or two until the market settles the triple witch expirations.

The 20 wk cycle lows came very scattered over the past 2 years, so my feeling is any intermediate term rally from here will offer several entries over the next 2 wks, they might not be the best entries though...

If it does a swift rally higher, then I will expect a much longer decline in terms of duration. I will think we are closer to a bear market than a bull market for the next several months...

- kisa

[airedale88]

pdx, maybe so, but at other INDU sell offs over the 20 yrs the author tested the system there was usually some sort of fundamental bs causing the decline. now maybe the yen carry and subprime stuff is the killer news and all the other fundamental past causes were not. that's out of my league to decide. it is just a technical timing system. fundies don't factor in.

Airedale, I am closer to be with you on the long side, as you said, I think it is worth to wait a day or two until the market settles the triple witch expirations.

The 20 wk cycle lows came very scattered over the past 2 years, so my feeling is any intermediate term rally from here will offer several entries over the next 2 wks, they might not be the best entries though...

If it does a swift rally higher, then I will expect a much longer decline in terms of duration. I will think we are closer to a bear market than a bull market for the next several months...

- kisa

kisa, i am looking for a 4.5 yr cycle low june/july, so caution is warranted.

[mortiz]

Aire, Thanks for posting your always interesting and solid work. I have been out of town for a few days, and have not been able to keep up with your posts as I usually try to do, so have a couple of questions: 1) I believe we are in a nesting of Hurst cycle lows currently (up to the 20 week cycles)? 2) You have posted the breadth indicator before, but is the chart a 21 day MA of net advances/declines? There has been little doubt price has been leading internals, as measured by the cumulative lines, on the downside for the past couple of weeks, which is historically unsustainable.... a study of this phenomenon was discussed on TW a week or so ago. What still bothers me for the immediate bullish case is the NYSE common and composite AD lines are still comfortably above their respective 1% trends (199 day EMA). Typically, at traditional (not Hurst) 40 week cycle lows, the AD lines test the 1% trend, so more work may be needed in correcting the overbought condition of these cumulative lines. The reason for the "price leading internals" during this correction, is most of the price damage has been inflicted on single trading days, not giving the internals the time to confirm the price carnage. This is likely the reason the levels of the breadth indicator on your chart has not reached extremes below zero yet.... or is violating -100 usually sufficient? Also, could you refresh my memory on what cycle time frame lows were satisfied in the summer 2006 price lows? Thanks Randy

[airedale88]

Aire,

Thanks for posting your always interesting and solid work.

I have been out of town for a few days, and have not been able to keep up with your posts as I usually try to do, so have a couple of questions:

1) I believe we are in a nesting of Hurst cycle lows currently (up to the 20 week cycles)?

2) You have posted the breadth indicator before, but is the chart a 21 day MA of net advances/declines?

There has been little doubt price has been leading internals, as measured by the cumulative lines, on the downside for the past couple of weeks, which is historically unsustainable.... a study of this phenomenon was discussed on TW a week or so ago. What still bothers me for the immediate bullish case is the NYSE common and composite AD lines are still comfortably above their respective 1% trends (199 day EMA). Typically, at traditional (not Hurst) 40 week cycle lows, the AD lines test the 1% trend, so more work may be needed in correcting the overbought condition of these cumulative lines.

The reason for the "price leading internals" during this correction, is most of the price damage has been inflicted on single trading days, not giving the internals the time to confirm the price carnage. This is likely the reason the levels of the breadth indicator on your chart has not reached extremes below zero yet.... or is violating -100 usually sufficient?

Also, could you refresh my memory on what cycle time frame lows were satisfied in the summer 2006 price lows?

Thanks

Randy

hi randy....

1. yes, an expected nominal 20 wk cycle nest of lows is due at any time .



2. yes, it is a 21 day s.m.a. of the daily NYSE advances - declines.



the advance - decline #'s that were falling off the 21 day s.m.a. kept the average from dropping too severely. adv - dec must strengthen here for the indicator to secure the buy signal.
no particular previous negative reading is needed, just a current reading near or above the zero line as the lower envelope is tagged.



Hurst phasing analysis suggests june 06 was a nominal 20 wk cycle nest of lows.

Edited by airedale88, 14 March 2007 - 11:21 AM.

[airedale88]

the creator of this system describes this signal (aside from occurring at bear market bottoms), as "this may take place at interim stages in an on-going bull market or it may reverse a steep INDU sell-off. it occurs when the INDU tags it's lower band and the NYSE 21 day mv avg of breadth is positive or nearly so"

that's what we have today. my only caveat is i think it's prudent to wait a day or more to make sure the breadth indicator does not fail and make a new swing low. in the notes i have the author indicates 39 signals were given over a 20 yr period from 1969 to 1989, 80% were profitable with an average gain of 10%, the 20 losing signals had small losses on average. add in that we are in the time window for a nominal 20 wk cycle low

if the signal deteriorates i'll post it.



the current buy and the previous july 06 buy are noted on the chart below...........

buy signal confirmed by today's adv/dcl numbers action...

http://stockcharts.com/c-sc/sc?s=$NYAD&p=D&yr=0&mn=6&dy=0&i=p50966274753&r=3113.png