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Cycle Analysis... a way of looking at price action.


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Cycle Analysis... a way of looking at price action.

  #131 (permalink)
 
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 glennts 
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glennts View Post
The current bar is the 6th in what is normally a 6 hr H-H rotation. I expect it to run into resistance at the level indicated and at that point will see if how it then behaves resolves some of this ambiguity.



Selling showing up during the 6th hour as anticipated. Notice the two same level Cyan 5 Min POC's that established where the sellers were willing to dump inventory over the following 20 minutes.

Price is going up, Cumulative Delta not yet as committed.

For now, as long as the trend of the Hourly Cycle remains higher I am a buyer of tests of Hourly support.

With stops in place.

Good luck, Be careful.

"If you don't want random outcomes, don't make random decisions."
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  #132 (permalink)
 
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glennts View Post
For now, as long as the trend of the Hourly Cycle remains higher I am a buyer of tests of Hourly support.


"If you don't want random outcomes, don't make random decisions."
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  #133 (permalink)
 
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The plot thickens Part 2.



Mentioned before how the high and low of a candlestick body ( open and close) have a greater significance in the way I look at bar behavior than the bar's high and low. One aspect of this that always gets my attention is what I refer to as a Double Body High or a Double Body Low. When a new bar opens at the same level as the prior close and reverses direction. Prior bar closes up, new bar closes down. This behavior has a relevance particular to bar length and to the Cycle time frame TWO levels higher and this is what makes it a behavior that is both interesting and of value. So much so that there is an indicator with a voice alert that calls it to my attention.

For example: an Hourly Cycle Low or High will often contain a 5 Min Double Body Low or Double Body High. On the 5 Min chart these occurrences are not necessarily exclusive to just Hrly Cycle turns and today, with the continuous overlapping of the 5 Min bars, they are showing up everywhere. If you look at 5 Min charts earlier in the thread you will see examples of this as a Cyan dashed line.

In the above chart arrows point to the Sienna dashed lines that mark the Double Body Highs / Lows that have occurred on the 360 Min bars. This behavior is reasonably consistent with the turn of the two levels higher Multi-Day Cycle ( 6 Hr / 24 Hr / MD Cycle ). This last bar will close with today's Globex Session and between then and now will be the FOMC interest rate announcement so this observation needs to be considered in that context.

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glennts View Post

After the overnight high, the presumed 24 Hr High, price broke the Sienna 6 Hr support and for the next 3 hrs that became resistance. The backside of the 24 Hr rotation. Notice the Sienna ma did not roll over but continued to angle higher.

The rectangles are 6 Hr blocks. There are typically 4 of them in a 24 Hr Cycle. In this 4th 6 Hr block price made a lower low and then broke to a new high. Could this have marked a 24 Hr Low? Possibly.
.....

The current bar is the 6th in what is normally a 6 hr H-H rotation. I expect it to run into resistance at the level indicated and at that point will see if how it then behaves resolves some of this ambiguity.

Solving the puzzle.



At the 6th bar mentioned in the quote and numbered in this chart price encountered sellers as expected and shown in a later post, but they could not hold the line. Price pushed up for another 2 bars giving an 8 bar count to what is normally a 6 bar rotation. The 6 Hr Cycle extended and further right translated in a demonstration of the strength of the underlying move.

At this point with bar 8 you can see the Stochastic which visualizes the 24 Hr rotations has now turned up making a statement that a 24 Hr Low is in place. With bar 9 there was a lower 60 Min High and a Lower 60 Min Low and a close below the Bar Pivot. The 6 Hr Session Cycle had rolled over and was correcting.

On the upside of the 24 Hr rotation price will find support on the Minor Cycle 6 Hr time frame.

The low of bar 10, seven hours out of the 24 Hr Low was put in on the Sienna 6 Hr ma.

Putting my money where my mouth is, I went long.

"If you don't want random outcomes, don't make random decisions."
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glennts View Post


The average duration of the Multi-Year Cycle is 42.4 Months and price is now entering that sweet spot. This does not mean the low is in and a low cannot be confirmed until price deals with the down sloping black ma who's direction represents the Trend of the MM Cycle. If the MY Cycle is going to push up out of a Low it will change the behavior of the MM Cycle... its Trend will change from Lower to Higher and the black Minor Cycle Ma representing that Trend will turn Up. How does it do that? Price will have to get above it in order for it to turn. This behavior gives you two useful pieces of intel. A way to find your place in this story and a means of anticipating where price is going to go. Notice on the two earlier lows where that second bar closed... right on the black ma. Can this Month's bar push up some 250 points to test the black Minor Cycle ma? Of course it can. Will it? Keep your eye on how price deals with the Monthly Pivot.


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From Post # 123 >> When I look at what is playing out during what has been described, and so-far behaved as the possible turn up out of a Multi-Year Cycle Low, and I reach down thru the time frames looking for similar patterns, all I come up with is a nagging feeling that this is a corrective pattern.<<

This has not changed.



That broad swath dropping lower from the upper left is the area of Multi-Month Cycle resistance. It is the backbone of the Multi-Year Cycle rotation. For the MY Cycle to turn higher price has to break thru this area.

If price cannot get thru here then a MY Low is not in place and the past 6 weeks have been a corrective retracement in an ongoing down trend. How does price behave in a corrective retracement? Aside from being orderly and well behaved, it tends to channel.

I've been looking for a way to gracefully extract myself from this thread and this as good a place as any.

The thread began with the discussion of a potential Multi-Year Cycle Low off in the near future and at a distance of several weeks, was able to project the swing low price with a 2 point accuracy. In the roller coaster weeks that followed that low a reasonably good job was done of anticipating and explaining the twists and turns within the context of Cycle Analysis. Now that price has completed the expectations outlined in those earlier posts, the circle is complete.

And, I'm tired of talking about it.

Earlier, information on the man whose theories got me pointed in this direction, J. M. Hurst, was provided and suggestions made about where you can find his out-of-print books. I am continually astonished when people believe they can come to master this approach to analysis after a few casual conversations and that putting the effort into reading the source material would not for them, be necessary.

If you see some merit in what has been presented here and in the 6E Currencies thread but can't quite wrap your head around how the various concepts fit together.

Then. Read. The. Book.

Re-read this thread.

And. Read. The. Book. Again.

If I see something interesting I may post again but until then... Good luck, Be careful.

"If you don't want random outcomes, don't make random decisions."
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glennts View Post



That broad swath dropping lower from the upper left is the area of Multi-Month Cycle resistance. It is the backbone of the Multi-Year Cycle rotation. For the MY Cycle to turn higher price has to break thru this area.
...



This Weekly chart is an update to the prior post and provides a good illustration of the 'backbone' concept mentioned earlier.

The lower left is the Covid Low and six weeks up out of that low price ran into the down trending 16 Week ma. Six weeks up out of the recent June 16th low price has once again run into the down trending 16 week ma.

The sub graph is price detrended against a 4 period ma and serves as a momentum indicator. Arrows mark the momentum highs and the matching weekly bar. Momentum highs / lows do not necessarily mark the end of moves but you can see in almost every instance that the following weeks were overlapping narrow range consolidation bars.

If the June Low is of the same Multi-Year Cycle magnitude as the Covid Low or the earlier 12/2018 low as has been speculated, then it is reasonable to expect a similar resolution with a break of the downtrend.

What makes this test important is if the decline is not over and in a worst case scenario, a Multi-Year downtrend is unfolding, then the 'backbone' will not break and it will serve as on-going resistance just a it served as on-going support out of the Covid Low.

I suspect there will be a test of the Green 4 period ma which is currently rising thru the 3980 area before there is a significant break higher. If during that test this area of Multi-Week support does not hold then things will become much more interesting.

"If you don't want random outcomes, don't make random decisions."
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glennts View Post


I suspect there will be a test of the Green 4 period ma which is currently rising thru the 3980 area before there is a significant break higher. If during that test this area of Multi-Week support does not hold then things will become much more interesting.


Price is testing the Green 4 period ma on this Weekly chart as expected and so far it is finding buyers. Looking at the left edge you can see how this ma does a reasonable good job of serving as the 'backbone' of the Multi-Month rotation which this S/R Band represents. Coming out of the 'presumed' Multi-Year Cycle Low this 1st MM Cycle needs to further Right Translate in order to turn the Middle of this MM S/R Band and the trend of the MM Cycle higher




On this 1440 Min chart price appears to have found a Multi-Day Cycle Low with price closing above its Bar Pivot while finding support in the area of the Green Multi-Week S/R Band. The thin White horizontals are the Daily POC's extending back for 80 days. The Market Profile on the right represents volume distribution for that same period and it is clear this cluster of POC's represents an area of considerable interest. For the MM Cycle to further Right Translate this area has to hold and the Bottom of the MW Donchian Channel marked with a black arrow cannot break.



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glennts View Post
Price is testing the Green 4 period ma on this Weekly chart as expected and so far it is finding buyers. Looking at the left edge you can see how this ma does a reasonable good job of serving as the 'backbone' of the Multi-Month rotation which this S/R Band represents. Coming out of the 'presumed' Multi-Year Cycle Low this 1st MM Cycle needs to further Right Translate in order to turn the Middle of this MM S/R Band and the trend of the MM Cycle higher




On this 1440 Min chart price appears to have found a Multi-Day Cycle Low with price closing above its Bar Pivot while finding support in the area of the Green Multi-Week S/R Band. The thin White horizontals are the Daily POC's extending back for 80 days. The Market Profile on the right represents volume distribution for that same period and it is clear this cluster of POC's represents an area of considerable interest. For the MM Cycle to further Right Translate this area has to hold and the Bottom of the MW Donchian Channel marked with a black arrow cannot break.



An important juncture in the larger story.

In this conversation about price falling into a Multi-Year Low, the interaction of price with its Monthly Pivot was emphasized. Earlier in the thread was discussed the tendency of bars in a downtrend to push higher out of its open looking for resistance and once found, pushing lower into the bar's close. That is what you see in the Monthly Chart below. Notice where today's close fell... the Monthly Pivot... another testimony to the relevance of that technical. There is one day remaining in the life of the candle and with a new month price will already be below that month's pivot.



In the Weekly Chart below you can see how the turn of the Green MW ma (15 days) does an excellent job of revealing the MM Cycle Rotation. The duration of these rotation has been very consistent at 12, 12, 12, 11 and this week at 11. The very low gave a minor bar count of 4 to the left and four to the right which I have discarded from the average. Earlier the tendency of Minor Cycles to compress during Dominant Cycle turns has been discussed. As of today's Close on the Minor Cycle SMA, this is a place where I would expect support under price to emerge when in an Uptrend. How price behaves here will be informative. The White boxes on the detrending oscillator show that in terms of momentum, this area is about as far as price will move below the MW ma when the Multi-Month Cycle is trending higher. Does this mean it will hold. No. But it does give the ES an excuse to do so.



A 1440 Min Chart below to provide more detail on earlier comments. The most important event to notice is where the Globex 24Hr POC accumulated...right in the area of the MM SMA.

The low put in late in the session was a 24Hr Cycle Low which means price will be pushing higher in the Overnight looking for the next 24 Hr High. If this turn Higher is also a MD Low and a MW Low then the 24 Hr Cycle H-H count will extend as the Buyers in these Higher Time Frames refuse attempts by the Lower Time Frame Sellers to push price lower.


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