Blocksmith Says: Big Low is Still Ahead of Us

3 November 2022

Yesterday we were looking at S&P 500 E-minis futures (ES1) and expecting a steep and sustained down turn going through the FED announcement yesterday, which the market has taken badly. 

Here are the cycles unpacked.

Green semi-circle is the 20 week cycle and its due to bottom around 20 November. Light blue semicircle 80 day cycle, dark blue one 40 day cycle. In cycles analysis 20 week cycle = 2 x 80 day; 80 day cycle = 2 x 40 day, and so on. 

Also when 20 week cycle bottoms around 20 November so do the others, that’s called the principle of synchronicity in cycles speak. The down sloping blue line (80 day VTL) is the trendline associated with the 80 day cycle. Basically had this been penetrated to the upside it would have meant the mid-October low was the 20 week cycle trough and would have called for much more upside. 

But price failed there and so all that last rally was only a 40 day cycle. The big low is still ahead of us.

Christopher Grafton
Christopher Grafton

Chris has been working in the markets for over 15 years variously as a broker, analyst and researcher. He is the author of a well-known book on Hurst cycles analysis, and runs his own market analysis software platform on Bloomberg. He’s also a keen student of both the cello and Brazilian Jiujitsu.

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