$SPX 9 Year FLD Target of 2150? 15


In my July post I mentioned there is an outstanding 9 year FLD target for the $SPX. It stands at 2150. It seems hard to embrace this possibility but it may well be that the $SPX will be the last man standing when these markets finally set their tops.

The interesting thing is that the 9 year FLD has accurately predicted price targets since the 2003 lows. The 2007 high and 2009 lows very achieved with the 9 year FLD as a forecasting tool. Actually the 2007 high was just shy. On the daily chart price crosses at 1183 in late 2005 on a dip not seen in the weekly chart. The target given was 1600 ish vs the 1576 achieved at the 2007 high.

SPX 1990 monthly 2014-10-22 9 yr fld

Looking at the current daily charts, by any measure one has to conclude that we saw the 40 week low last week. It is late in its arrival which is a sign of bearish things to come. If the 9 year high target of 2150 were to be achieved in the coming 40 week cycle, the current arrangement of FLDs would likely require the $SPX to break to new highs sometime by late November. BTW, I tried to get Sentient to accept the recent low as a 40 week low. No dice.

SPX 1990 daily 2014-10-22

The bottom line is that I would not be shorting the $SPX here. If you cannot bring yourself to go long on a pullback, I suggest standing aside until things clear up. Once this current rally is over and tops out, ideally to new highs, it will be chaos for equity markets thereafter.

cheers,

john

 

 

 


About SilentOne

I am a retired Chemical Engineer. I became a house dad back in 2000 and then devoted all my free time to the markets. After years of technical analysis study I decided upon Hurst cycles, which has been my primary method since 2007.


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15 thoughts on “$SPX 9 Year FLD Target of 2150?

  • Jeffrey Young

    If the 18 month VTL was compromised how could there be a new high? A peak of the 54 month cycle equals a peak of the 9 year at least until the 54 month cycle has bottomed. You must not agree with Davis’s VTL analysis or with William Randall’s 4 year VTL statistics either?

  • SilentOne Post author

    Hi Jeff,

    The question is whether this will just be a bear rally for the $SPX, or whether new highs are possible. We have a number of Hurst tools and this gives us a way of assessing probable outcomes. Prior to last week’s low, I had no real opinion on what the next rally does. But it was almost certain that we would see a swing low at some point in October. $SPX has broken its 5 week VTL to the upside in a mere 6 trading days. The Nasdaq is attempting it today. The DOW has not yet. The $SPX is clearly leading here.
    Based on volume analysis, the ES broke above and held the 1926 level. The next level up is ES 1965ish. I expect the ES to consolidate between these two levels before a decision is made. In the mean time I would be careful with bearish bets.
    cheers,
    john

  • Derek Frazier

    IT is a possibility that this past low is the 18 Month trough. We are in a bull market. If it goes above the highs, Jeffrey, then this trough was the 18 month trough. If you believe that this was the trough of the 40 week cycle, then the peak should occur in the 1st 20 week cycle, during the first 80 day cycle. Looking at historicals, this gets really hard to judge. If the reun it up and you can take a short off of a 40 day VTL break, then that would be great. Also, there should be a straddled trough of this 40 week cycle, but its difficult to compute the peak without having those FLD targets fulfilled that John mentioned. I would like to see at least the smaller cycle FLDs fullfilled to take shorts.
    Could it be the 18 month trough?

    • SilentOne Post author

      Hi Derek,

      I allowed for the possibility of an 18 month low in my last $TSX analysis. Because the $SPX has had such a strong move out of the 2011 lows, it is really hard to judge. In the mean time, if it is a 40 week low or larger that we’ve seen last week, markets are likely up into almost Christmas.

  • William Randall

    If you base your FLD projection on the average of the last 4 oscillations of the 4 year price wave as defined by Hurst’s bandpass filter parameters, the 9 year FLD target has been met (see chart below). However, as I have mentioned before, that FLD number is dynamic and will change based on how the “nominal” period is calculated.

    • Jeffrey Young

      Derek I do realize that the trough analysis has several distinct possibilities a you point out. I am sticking with Williams interpretation of the 4 year cycles. The main thing I am looking for is if this rally falls short of the September high then that should seal Williams interpretation as I understand it.On an overawe basis it makes sense with work I do with time symmetry and the late Terry Laundry’s work. However, I make no bets until I see either a lower peak or a new high in which case it will be time to reassess the cycles.

      • SilentOne Post author

        One thing to watch is the McClellan Summation Index for assessing the quality of this rally. It dropped well below zero and now a rise above zero is needed for confirming a decent low here. Bad things happen when the summation stays below zero.

        • SilentOne Post author

          Hi William,
          I looked at the bandpass filter chart for the 40 week cycle you provided for the $TSX and used the same cycle periods and troughs to rephase the $SPX (based on commonality). This is what I produced and you will note that Sentient has marked the recent low as an 18 month low despite my efforts (see chart next comment). The point is that with this phasing, the 9 year cycle period is of course much shorter at 7.1 years. The FLD target in this case yields approx. 1940, a target which has already been met and concurs with the chart you show. So yes I now have to question whether new highs are possible for the $SPX. I do really appreciate your posting the bandpass filter charts. Thank you.
          It is obvious that I need to begin using a different nominal Hurst model for my current analysis of the $SPX and $TSX.
          cheers,
          john

          • huub de groot

            Hi John,
            This is a 9Y cyclic analysis of SPX, more or less “by the book” (p 125, anatomy of a trade), with the half span moving average to provide a target. Cycles are short, and target should not be miles away at present, in my opinion.
            Best,
            Huub

          • SilentOne Post author

            Hi Huub,

            Thank you for posting your 9 year cyclic analysis of the $SPX. As I write the NQ is 30 points from its highs last month and Biotech has already broken out to new highs. Biotech was one sector of the market where I thought a bubble was bursting this year …