Thanksgiving is a North American holiday, but as someone with many friends in North America I feel I can join in to some extent. The holiday has its roots (according to Wikipedia) primarily in “giving thanks on successful completion of the harvest”, which strikes me as a particularly cyclic holiday and it seems very appropriate this week, as the expected 20-week cycle trough looks as if it has now formed in price. And so in my own small way I am giving thanks: amongst other things, for the completion of a market cycle, the start of a new one, and for the completion last week of a successful olive harvest (we are now enjoying freshly-pressed olive oil!)
Of course the holiday this week has also provided us with the third week this month in US markets with shortened trading or distorted prices, but nonetheless the cyclic picture seems clear.
I suggested last week that the 20-week cycle trough might have formed in the US markets on Friday 16 November 2012, and this week the S&P 500 steamed upwards making that assertion seem ever more likely.
The Nasdaq, having led the downwards charge into the 20-week cycle trough bounced the hardest (in terms of percentage), leaving little doubt that the 20-week cycle trough has indeed formed.
The Euro was also infused with the holiday spirits and bounced strongly this week. We have been expecting a bounce out of the 40-day cycle, and the bounce this week fits that bill and more. It has been just over 17 weeks since the 18-month cycle trough of 24 July 2012, and so it is just possible that the cycles have compressed and the Euro is enjoying the bounce out of an early 20-week cycle trough as its cycles fall back into step with the stock markets, but it is too early to tell yet whether that is the case. In the meantime we need to treat this move as a 40-day cycle bounce, but give it room to exceed our expectations.
Gold’s thanksgiving spirit lasted all of Monday, and then nothing very much happened until Friday. Perhaps too much tryptophan from all that turkey? On Friday Gold overcame its sleepiness and continued upwards (largely because of a falling US Dollar). It is possible that Gold is only now forming a late 40-day cycle peak (cycles do run long in Gold), but either way I do expect Gold to achieve yet higher prices as it climbs to an 80-day cycle peak expected by about the end of the year.
30 Year US Bonds
Bonds fell hard this week, leaving in place a prominent peak which might be an early 20-week cycle peak, which would bring the Bond cycles into harmony again (inversely) with the stock markets and perhaps the Euro. We were expecting a 40-day cycle peak to occur, and that might be all this peak was, but if this downwards move continues as it started we will be placing the 20-week cycle peak on last Friday’s high.
Even Crude Oil mustered a thanksgiving bounce, although the whole struggle upwards out of the 7 November 2012 20-week cycle trough is looking weary and bearish, providing for a bearish outlook as discussed last week.
US Dollar Index
The US Dollar has needed to come down to form the 80-day cycle trough, which it did this week, slipping downwards rapidly on Friday. This sharp move down is not yet an indication that our bullish placement of the 54-month cycle trough in September is wrong, but if it continues to fall and turns this cycle shape more bearish then we will revert back to phasing that trough as a trough of the 20-week cycle.
Two final “thanks-giving” notes: thank you Robyn for suggesting many years ago that I should “take a look at the work of a man called Hurst”! And this was the first week of actual trading for students in our FLD Trading Strategy course. Each student progresses at their own pace, and of those students who were ready to trade this week it is very encouraging that every single one of them ended the week in profit! It is very early days of course, but nevertheless encouraging. It is also rewarding (is that the right word?) to see some of them beating me at my own game!
There has been tremendous interest in the FLD Trading Strategy course, and many people have emailed us to ask when we will be starting another one. The good news is that we will be starting our next course in December and so make sure that you are receiving our emails about the FLD Trading Strategy if you missed out on the first course.
Have a good week, and profitable trading!