Stoxx futures - 15 August 2023

Analysis & Learning Aug 15, 2023

You will come across specific terms in these notes (FLD, VTL, and so on). Rather than explain them each time, you will find definitions here: guidance notes for Hurst cycles terminology  

Stoxx futures - 80 day cycle trough zone, but caution.

80 day cycle trough zone but caution.
Price looks weak, but in fact we are in an 80 day cycle trough zone, suggesting that tactical downside is limited.  A nearly horizontal 40 day VTL plots just above 4,200, pretty much at the 40 day FLD downside projection and squarely inside the 80 day cycle nest-of-low's circles at the bottom of the chart.  However, with all of that said we have very recently passed through a potential 18 month cycle peak and the 18 month cycle therefore is early stage down.  We are expecting some jostling for position near term and potentially a bounce.  However the weight of the new 18 month cycle reversal should mute rallies and if there is a breakdown after a bounce here it should be taken seriously.

Christopher Grafton CMT

Chris has been involved in the markets for 20 years. He is the author of Mastering Hurst Cycle Analysis and is an experienced working technician. Chris holds the CMT qualification.