JM Hurst suggested that there are certain standard cycles that are universal and can be applied to any asset classes. Many cycle analysts often complain that cycles vanish without giving a prior indication. The major reason is the interaction of different cycles of varying magnitude.
The subject might look complicated but it is no different than the Elliott wave principle. The major difference is that the Hurst Cycle analysis helps us to predict time and the Elliott wave focuses more on price. This element of time can help us to forecast the Elliott wave pattern.
As shown in the chart below, we have applied time cycle on the Nifty Daily chart along with Neo Wave. The important part of the Hurst Cycle is that if you know that major as well as smaller degree cycles are citing towards probable bottom or top, then you can save yourself from making the wrong trade. In the market “when not to trade is the key to success”.
We published the chart in our monthly report “The Financial Waves Monthly Update”.
Elliott Wave & Cycle Analysis
As shown on the Nifty daily chart, the volume on that day was also sufficiently higher compared to that of the other days. It seems that a huge dump of stocks happened at the highs of the 11,794 levels and taking it out in the current month is going to be a big challenge.
55 days time cycle
This cycle has continued to work extremely well and it managed to form a low in August as well. The low near 11,111 is also a 55-day cycle low and so the same should remain protected for the cycle to be in the buy mode. A breach below this will increase the probability that this cycle has topped out until the next low is formed.
This study of cycle analysis is independent of price forecasting that we do use Elliott wave or Neo wave.
Imagine the power you will have if time cycles and Neo Wave price patterns both are in sync and pointing towards the same direction.
(The author is Founder of AshishKyalTradingGurukul.com / WavesStrategy.com. He could be reached on Twitter at @kyalashish)
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