Hurst’s Time Cycles working across all Time frames, which one to select?

Hurst’s Time Cycles working across all Time frames, which one to select?

For a cycle practitioner the most important aspect is to understand that there are multiple cycles nested together. Prices behave in a cyclical fashion and cannot be independent to it. Everything in nature and financial markets is governed by cycles right from the Solar Cycle which is 11 years, Lunar cycle of 28 days, Seasonal cycle, Economic Kondratieff cycle of 54 years, Decennial cycle 10 years, Presidential cycle of 4 years and many more.

It is our effort to understand the various cycle currently being active on the given asset class and see where we stand with respect to them.

The simplest way of cycle identification is to see if there are low being formed in systematic fashion. There are various tools available to Detrend the prices and understand the underlying cyclicality. J. M. Hurst’s has brought forward Hurst’s Cycle analysis which has opened up another realm of looking at markets and timing it right from the smallest time frame to the biggest degree.

We are not getting into the science of cyclicality but will show the application of these cycles after careful evaluation and synchronization. Let us begin by looking at the bigger degree cycles first and scale down the hourly charts.

Below is the chart of Nifty picked up from the Monthly research report

Nifty has been forming lows every 85 weeks. We can see that the crash seen in 2008 also formed a low on this time cycle. This later followed by multiple major lows forming precisely after every 85 weeks.

This shows that prices are following the rhythm of 85 weeks. On two occasions – one in 205 and another in late 2021 prices formed a top instead of a low. This we call as Inversions where tops are formed and not lows. This happens rarely and indicates bigger cycles are topping out.

Covid 2020 – Nifty showed one of the best rallied from last week of March 2020 till 2021. This rise happened despite of Covid wave 2 hitting everywhere which was much more intense and strong. However, prices continued to rise as the time was right and this is the proof that shows when time is in favour events does not matter.

June 2023 – We have talked about this cycle more than a year prior to Jun 2023 and mentioned how we can start the mother of all bull markets in the year 2023. We can already see a rise 16900 levels to beyond 22k which is more than 5000 points on Nifty and whopping 31%.

The above clearly shows the edge that one can get by seeing the Time cycle and the rhythm of market as it moves. The next cycle is going to be due in February 2025 which will be another opportunity for long term bet on “Bharat” to ride the ongoing “Mother of all Bull Markets” – Are you ready!

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