Hurst Cycles Reveal Next Big Drop | Market Analysis”
INTRODUCTION
Since the SP500 index is forming a major high,
I am going to start this week analysis by the long term time picture.
Let’s start by analyzing the monthly chart.
By placing the last 54 months cycle in October 2023, and with the Hurst rule of synchronicity, the October 2023 is also an 18 months cycle low.
If this analysis is the correct one, the very bullish rally since that low, is the first 18 months cycle of the 3-18 months cycle forming the next 54 months cycle.
Technically the sp500 index should form his next 18 months cycle low on his cycle line, by the end of May.
On this monthly chart I placed a blue up trend line, this is the 40 weeks cycle trend line or VTL.
When the SP500 index cross below this trend line, this will confirm the higher high before the crossing, will be the 18 months cycle peak,
And the SP500 index will start his correction in direction to his cycle line.
The following table, is the table with the monthly cycle lines for the next 6 months, and their potential target in case the SP500 index cross below them.
If the SP500 index cross sharply below them, then we may consider the second scenario from the December 30 2024 update.
But for now there is nothing in favor on this second scenario.
Let’s observe where the actual 18 months cycle peak formed.
If the 18 months cycle peak was on February 19, the peak formed on the right part of the cycle, Hurst call that the right time translation,
The right time translation for the 18 months cycle formation, suggest a moderate correction,
On the bottom of the chart, the green semi-circle represent the 18 months cycle and the red one the 54 months cycle, or the 4.5 years cycle.
We can see during the October 2023 low, the SP500 index found support on his 18 and 54 months cycle line, respectively the green and red cycle lines.
This is another point, going in favor of labelling the October 2023 low as a 54 months cycle low.
The orange cycle line is the 9 years cycle line,
During the March 2020 low, called the pandemic low, the SP500 index found support on his 9 years cycle low.
Confirming the October 2023 was certainly the 54 months cycle,
According to Hurst rules, the first cycle after a major low should form his low on his cycle line, that’s what’s happened in October 2023,
So expecting the next SP500 index correction finding support on his cycle line is very reasonable.
Let’s see now the 20 weeks cycle chart.
Since the last 20 week cycle low on January 13 2025, the SP500 index basically trade along his cycle line and the rally was very weak.
Which confirm the possibility of the February 19 high, is the next 20 and 40 weeks cycle peak.
If the February 19 2025 at 6,147.43 is the actual 20 weeks peak,
Then this peak formed on the left part of the cycle, left time translation peak, which technically is bearish at least for the short term.
During the next correction, the SP500 index should cross below his cycle line, and provide a potential downside target.
In the following table, there is the 20 weeks cycle line for the next 2 months and their potential targets when the SP500 index will cross below.
The next 20 week cycle low is expected to form on May 20, the green vertical dashed line.
The 40 weeks cycle.
By the Hurst principal of synchronicity, this 20 weeks low will also be the 40 weeks cycle low.
Technically, since it’s the second 40 weeks cycle, since the major low in October 2023,
The SP500 index supposed to cross below his cycle line, providing a potential downside target.
Here the table with the cycle line for the 40 weeks cycle for the next 2 months, and their potential targets if the SP500 index cross below.
The 80 days cycle.
The SP500 index is in crucial time, since the January 13 low at 5772.31, the SP500 index crossed above his cycle line at 6058.55 for an upside target at 6343.79.
Since this signal the SP500 index, has been moving sideways, and still far away from his target, which is not a very bullish sign.
Friday decline, was very close to the first cycle line, a sharp crossing below this week or next week, will confirm the possibility of the February 19 all-time high at 6147.73 was certainly the 40 weeks and the 18 months cycle peak, in this case we can expect the SP500 index to move down until the end of May, date at the expected 18 months cycle low to form.
The next 80 days low is expected to form on March 12, and technically supposed to find support on his cycle line.
For now the 63432.79 target is still valid until the SP500 index cross below his cycle line, which will invalid it.
The 40 days cycle.
The last 40 days low was on January 13 and the next one was expected on the February 21, last Friday.
At that stage of the cycle, the SP500 index should find support on his cycle lines.
But since the 40 weeks and the 18months cycle are in a down phase, they may put pressure to the downside, there is a high probability the SP500 index may cross below his 40 days cycle line this week or next week.
Below there is the table for the support line and their potential target, if the market cross below.
The 20 days cycle.
This year, the 20 days cycle give 4 trading signal, 3 was successful giving a 75% of success rate.
Since the last 20 days low on February 3, the SP500 index crossed once above his cycle line at 6064 providing an upside target at 6204.17, the February 19 all-time high 6147.43, missed his target by only 0.91%.
18 days elapsed since the February 3 last 20 days low,
On the Hurst nominal model, the 20 days cycle have an average of 18 days, so we can considerate the Friday’s low was the 20 days low.
If that is correct the next one will be expected on March 11.
But we have to keep in mind the 20 days cycle can run little bit longer, which is very common when the trend changing.
Friday the median price was right on the cycle line at 6063.17,
on the chart I put as reference the 5978.91 potential target, this target will be valid only if the SP500 index trade below his cycle line Monday confirming his crossing.
A rebound above the cycle line with a green candle could confirm the Friday’s low is the 20 days cycle low.
Following is the table with the 20 days cycle line and they potential target if the SP500 cross below this week after a rebound on Monday.
In conclusion
The SP500 is in top formation, the correction should be moderate, but we have to keep in mind the possibility of a higher degree cycle correction, but in any case the next correction will be at least an 18 months cycle low.