I’m a bit of a gadget freak, I admit it. This week I realized that one of the reasons I created Sentient Trader was so that while preparing dinner for my family in rural Italy on Wednesday evening I would nevertheless be one of the first to know that a big Hurst Cycles moment was happening:
On Wednesday the S&P 500 (ES futures) crossed below the 18-month VTL, which I wrote about three weeks ago.
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Now although price crossed below the VTL, that is only a big moment if median price crosses clearly below the VTL. On Thursday daily median price dipped below the VTL, but as this is an 18-month VTL I would like to see more than a single day dip below it. Ideally I would like to see the median price on a weekly chart cross below the VTL before declaring this Hurst Cycles moment. Here is the weekly median price as of Friday morning:
What is the importance of this moment?
If price crosses below the 18-month VTL it would confirm that the current 4 & 1/2 year cycle peak has formed in the market. That means that we are unlikely to see prices higher than the highs earlier this month until after the next 4 & 1/2 year cycle trough. That will probably only occur in 2016.
If price does not cross below the 18-month VTL then it will provide support, and we must wait another few cycles until the cross does happen. Eventually all VTL’s are crossed.
I wrote about the meaning of price crossing the VTL in this post, and also wrote this week about the formation of what I believe is a textbook G-category price and FLD interaction.
Even though the moment hasn’t actually occurred yet, I did sneak another look at that alert on Wednesday evening, just to savor the moment as it were:
Have a great week and profitable trading!
PS: There were other reasons for creating Sentient Trader, but receiving real-time alerts about Hurst Cycles events has to be one of the coolest!
