Looking at The HSI from a technical perspective we can see that the recent top came in a few different ways which is always easy to see with the benefit of hindsight but by looking back and trying to understand the behavioural characteristics of the mkt through the interaction of timing and pricing componets we can try and establish a directional roadmap to look forward .
The recent top at 23593 runs out a 10 year cycle from the old top 16839 in 1997 which was the first significant high after incorporation . sometimes a linear 10 year cycle can be reasonably accurate in particular when multiple time frames move into directional alignment -/+ so sometimes projecting these larger cycles fwd from significant turning points can lay the foundations in establishing where the mkts might run into zones of resist or otherwise but they are not a stand alone function and should be viewed in context to the prevailing structure of the market and the harmonic balance and interaction between the smaller sub cycles .
Still looking at how that top came in and switching down to a daily chrt there is a 144 day cycle blowing off into the 23593 top also so breaking this cycle down further and trying to understand how price and time are moving through the proportionate parts of the square in particular the timing divisions .
the origin point for the 144 day cycle is the low at 18659 so placing SQ144 over the chart we can see price rallied up to 1/2 of square in time ( 72 ) and found resist at 21098 and from that point we had a small retracement into 2/3 of the square ( 96 ) which set up for a 48 day blowoff to complete the 144 day cycle . this all fits togethor like a glove in hindsight and sometimes these cycles can be accurate if pattern is confirming the timing divisions and other times there might be other factors at play just beneath the surface that can throw your analysis completely of base but generally its ok .
So we have a 10 year cycle running out on the mthly chrt . first significant top out from incorporation . 10 years high to high .
then scaling down we have the 144 cycle aligning with the 10 year cycle and there is also a 180 day cycle high to high on the daily chart also but I didnt mention that because the pricing harmonics are not all that strong within the square .
Range extensions on the weekly chrt : breaking down the large 18445 - 8255 range into its percentage retracements and observing how price has reacted at certain lvs shows us a few things . the midpoint at 13286 held strong support as did the 3/4 point at 7674 . past energy points become future energy points and can sometimes be numerically related . projecting ( range ) 10190 upward as range extension we can see the 1/4 extension stopped the rally at 20846 and the 1/2 extension bought in the top at 23593 so this is an important technical boundary .
Range extensions were also at play on the daily but on a smaller scale .
18640PPL - 21098PPH 100% upside extension hits 23593 .
Looking forward : balancing price corrections in the bull campaign
1st correction : retraces 3126 pts into 2004 low
2nd correction : retraces 2231 pts into 2006 low
3rd correction : retraces 2316 pts into 2007 low
so the largest overbalance in price is 3126 in this campaign and the average is approx 2273 . taking 3126 off the current top will take us to 20473 breaking important support at 21098 on the way down . this is only a possibility as I am just balancing the corrections and watching price around these zones
taking 2273 off the current top will take us to 21320 keeping us above critical 21098 support .
First timing date is due 17th Aug :
Running SQ180 over the weekly chart puts forward several possibilities but first it is important to look at how price and time are rotating through the square . running the SQ180 out from xxx PPH price action rallies into 5/8 square in time and then subsequently retraces into 2/3 square in time before pressing higher . I am not giving out the origin point but just trying to establish a transitional structure based upon past characteristics of the square 7/8 of the square brings in a low so there is a possibility that a completion of time into 17th August might bring a change of trend .
At this stage it is hard to gauge whether the 17th might bring in a low or or a lower high but remaining open to the pattern of the mkt and assesing how price structure is behaving around this point might set something up , I dont know , it could just turn out to be nothing but at least we have a someboundaries to work with . there are no convergent daily cycles to line up with the weekly 180 but sometimes the dominant cycle will overide the sub cycles .
Second timing date is less significant but worthy to note : 10th Aug
this cycle doesnt look very strong SQ120 out from XXX with midpoint vibration at 60 weeks . price and time are not moving in harmonic alliance but without discounting this it is worth watching .
Tieing everything togethor : looking at the prevailing structure of the mkt and the HSI does look rather weak with recent price action gapping lower and not closing that gap within 3 days might indicate the possibility of further downside . the two large black candles are not indicating strength and by balancing the ( two ) cntr trend possibilities against the timing dates provided we have a few strategies to play with but pattern is king and time turns trend , if you can balance the two it can sometimes shine a light on mkt direction .